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Germany's €500 billion infrastructure fund featured prominently in discussions at Expo REAL, with institutional investors showing strong appetite for the opportunities it could create. Yet many agreed that behind the enthusiasm lies a fundamental problem: Germany lacks the capacity to deploy the money effectively. The country is short around 10,000 skilled workers needed to spend even €30 billion annually, according to IW Cologne. And the ifo Institute warns that without addressing these bottlenecks, much of the funding could “evaporate due to rising prices.”
At the recent Börsen-Zeitung Private Markets Week, Frank Dornseifer, Managing Director at the Bundesverband Alternative Investments, was blunt: “So far, we don't have a success story here.” He referred to the reverse home bias where German institutions favour infrastructure abroad over domestic opportunities. Historical obstacles included poor regulation, unfavourable tax treatment and special fund rules that prevented infrastructure investments structured as partnerships.
Framework improving but execution remains elusive
Recent changes have improved matters. The abolition of sales tax on management fees eliminates what Max Wirsching, Head of Private Capital Solutions at development bank KfW, called a “huge competitive disadvantage” versus Luxembourg. “This is much more important than government investment programmes,” he noted.
Verena Kempe, Head of Investment Management at Kenfo, the state fund for financing nuclear waste disposal, observed that the infrastructure fund has “generated a lot of interest” but stressed that “Germany must now seize the momentum.” Dornseifer dismissed EU Savings and Investments Union reforms as “not the big game changers.” What matters, he said, is whether bureaucracy is truly reduced and processes simplified.
Former rail network manager Alexander Doll identified a municipal investment backlog of €215 billion, mainly in roads and schools. Municipalities currently use “hardly any private capital,” creating “huge” opportunities for public-private partnerships. Yet rail projects still take 12 to 20 years from planning to implementation.
Christian Alexander Schmid, Executive Board member at Helaba, emphasised that infrastructure integration is “particularly important in modern real estate development,” covering digital equipment, transport links and energy supply. Lengthy approval procedures remain a “major obstacle.” “We need to become much faster,” he said. Despite the Bau-Turbo programme, the gap between demand and available housing remains “immense.”
Infrastructure quality directly affects property values. Better transport links raise residential appeal, while reliable energy supply supports logistics and industrial assets. The fund’s effectiveness will ripple through real estate markets beyond direct construction opportunities, was the common consensus.
Capacity crisis threatens to consume the benefit
Outside the Fair, the ifo Institute delivered a stark warning. “It is essential to ensure that funds are used efficiently and don’t evaporate due to rising prices,” said Oliver Falck, Director of the ifo Center for Innovation Economics. The sudden rise in public demand could push up wages and land prices and inflate costs for construction and planning.
IW Cologne quantified the problem. To deploy €30 billion annually over twelve years, Germany must expand contracting capacity for bridges and roads by nearly two-thirds. The skills gap already stood at 69,000 workers between July 2024 and June 2025. In civil engineering and site management, 81% of vacancies remain unfilled. IW expert Alexander Burstedde warned that a three-percentage-point price increase would “devalue the special fund’s construction costs by €100 billion.” His conclusion: “The federal government must recruit more skilled workers and make construction easier. Otherwise, billions will be wasted.”
Tim-Oliver Müller, Managing Director of the German Construction Industry Association, said that “so far, hardly any money has been flowing” due to long planning and award times. Construction firms retained staff through difficult years, but “if no projects come onto the market, companies will decide next year whether to maintain employment.”
Investor appetite remains strong. A survey by Intreal confirms that 52% of institutional investors plan to increase infrastructure allocations in 2026, with 48% holding steady. Two-thirds expressed interest in renewable energy, 59% in communications infrastructure. Only 7% want to allocate to offices, while residential (57%) and logistics (54%) maintain strong appeal.
REFIRE: The €500 billion infrastructure fund represents genuine opportunity, shown by institutional appetite and improving framework conditions. Yet opportunity without execution is merely aspiration. Germany’s skills shortage and bureaucratic drag threaten to consume much of the fund’s value through inflation before it reaches construction sites.
For real estate investors, the question is whether projects materialise at viable economics or whether capacity constraints push costs beyond acceptable returns. Framework improvements and tax reforms do make Germany more competitive as a fund domicile, while municipal infrastructure backlogs offer clear targets. But without parallel investment in skilled labour and faster approvals, much of the €500 billion could disappear into delay. We suggest monitoring tender flow and project starts, not political declarations — because only cranes, not committees, will decide whether Germany’s infrastructure fund becomes real.