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German institutional investors are abandoning offices while dramatically increasing infrastructure allocations, according to INTREAL's latest investor survey. Just 7% of the 71 institutional participants, including savings banks, insurance companies, pension funds, foundations and family offices, plan office investments, while 52% intend to expand infrastructure exposure in 2026.
The survey, conducted by the Hamburg-based service KVG managing €68.7 billion in assets, reveals that 96% of respondents have invested in real asset funds or plan to do so by 2026. Nearly half (48%) invest in both real estate and infrastructure, while 45% focus exclusively on real estate and 3% solely on infrastructure.
Within real estate, residential (57%) and logistics (54%) dominate investor preferences, followed by retail focused on local suppliers (36%) and social and healthcare properties (19%). The 7% office allocation marks the first time healthcare properties have overtaken offices in INTREAL's investor survey.
Conservative positioning and infrastructure pivot
Core investments attract 56% of respondents, with a further 33% targeting core-plus strategies. Return expectations have moderated: 40% anticipate initial distribution yields between 3.5% and 4.0% annually, while 26% expect 4.0–4.5%. Just 19% target yields of 4.6–5.0%.
Sustainability credentials are now critical. Fully 91% of investors require Article 8 fund classification under SFDR, though 20% would consider Article 6 or Article 9 alternatives. Geographic preferences reinforce the flight to safety. Germany commands 67% of investor focus, followed by Europe at 63%. US interest has “declined significantly,” INTREAL observed.
Among those allocating to infrastructure, 52% will increase exposure in 2026 and 48% will hold steady. None plan reductions. Renewable energy dominates sub-sector interest at 66%, followed by communications infrastructure at 59%.
"Now that real estate has become an indispensable part of institutional investors' portfolios, the infrastructure asset class is clearly on its way to achieving similar significance," said Markus Schmidt, Head of Infrastructure Business Development at INTREAL. The appeal centres on "generally predictable and stable long-term cash flows" matching the liability profiles of life and pension insurers, family offices and foundations.
European infrastructure assets attract 94% of investor interest, with Germany specifically cited by 45%. Structure preferences are split almost evenly between German (31%) and Luxembourg (28%) vehicles, with 38% viewing both as equally attractive.
Implications for capital deployment
The INTREAL survey confirms patterns visible across the German investment market: traditional commercial real estate faces capital flight, while defensive residential, long-lease logistics and infrastructure assets absorb available deployment capacity.
The tilt to infrastructure reflects demand for predictable, often inflation-linked cash flows that many commercial assets now struggle to deliver. Infrastructure offers contractual income and essential services—certainty that the office sector increasingly cannot match.
INTREAL Managing Director Malte Priester described the infrastructure expansion as "a logical development following the establishment of real estate funds and the increasing differentiation of this segment over the past two decades." The firm has secured infrastructure asset class licences in both Germany and Luxembourg, anticipating "considerable growth potential in the coming years."
The moderate return expectations, clustering between 3.5% and 5.0%, show that institutional investors have recalibrated pricing from the 2020–2022 era. They now accept lower nominal returns in exchange for stability, sustainability compliance and reduced leasing risk.
INTREAL's asset growth supports the survey findings. Assets under administration rose €2.1 billion to €68.7 billion in the first half of 2025, representing 3.2% growth and significant acceleration on the prior year. The firm now administers 330 funds across 2,807 properties.
The survey captures German institutional investment at an inflection point: abandoning offices, consolidating residential and logistics positions, and systematically building infrastructure allocations. The question for 2026 is whether sufficient infrastructure deal flow exists to absorb the capital institutions intend to deploy - or whether competition for renewable energy and communications assets will compress the moderate returns investors currently expect.