INREV Conference 2025, Berlin
Berlin played host last week to the annual gathering of Europe’s non-listed real estate sector, as INREV convened over 400 senior industry players for three days of discussions, networking, and strategic soul-searching. Against a backdrop of geopolitical instability, fluctuating valuations, and an investment market still wrestling with the aftermath of economic shocks, the mood in the Berlin's Intercontinental Hotel was one of cautious optimism tinged with realism. Public pronouncements tended towards hope; private conversations were marked by a sober recognition that the road ahead will demand patience, discipline, and adaptability.
The tone for the event was set early by Kathleen McCarthy, Global Co-Head of Real Estate at Blackstone, who told delegates bluntly: “We are in a moment of extraordinary uncertainty.” In a wide-ranging interview with CBRE IM’s Sabina Reeves, McCarthy reflected on how the persistent geopolitical and financial turbulence is testing investment assumptions across the board. While she noted that Blackstone’s real estate division had enjoyed a strong first quarter, she conceded that investment committees everywhere are grappling with the durability of their underwriting models. “The faster some of this uncertainty can be resolved, the better,” she observed—but the underlying message was clear: the uncertainty is here to stay, and strategies must develop accordingly.
Indeed, while the stage presentations largely projected a sense of underlying market resilience, the conversations outside the auditorium told a more guarded story. A number of investors, particularly among long-term pension funds, expressed concerns about liquidity, redemption risks, and the sector’s ability to maintain its traditional role in institutional portfolios. As one senior industry veteran put it, real estate must urgently “gain the confidence” of long-term allocators by becoming “more transparent, more liquid, and more responsive.”
Uncertainty as the new constant
While there was little sign of widespread retrenchment, the emphasis has clearly shifted towards a more selective and defensive positioning. Peter Hobbs of Bfinance captured the prevailing mood, noting that although there are undoubtedly attractive investment opportunities emerging, most capital remains firmly on the sidelines: “The capital is still there because performance isn’t there yet—and the uncertainty remains.”
Anders Fogh Rasmussen, former NATO Secretary General, reinforced the geopolitical risks in a sobering address that left few delegates in any doubt about the scale of external threats facing the global economy and, by extension, the real estate sector.
Despite these headwinds, there is little appetite for panic. As McCarthy pointed out, Europe remains an attractive hunting ground for capital, with particular opportunities emerging in logistics and manufacturing-linked sectors, where supply constraints could ultimately drive rental growth.
Shifting capital sources and allocation trends
New data released by INREV ahead of the conference points to a significant recalibration in capital sourcing. For the first time, Asia accounted for the largest share of new global real estate fund commitments in 2024, supplying 43% of the €118 billion raised—well above the historical average of 26%. This reflects both a growing institutional appetite across Asia-Pacific and a relative retrenchment by traditional Western institutions.
Insurers and pension funds, once dominant sources of capital, saw their share fall to 42%, while allocations from non-traditional investors such as wealthy families rose markedly. According to INREV’s head of research Iryna Pylypchuk, this signals a structural shift: “Fund managers have become more successful in tapping alternative capital sources at a time when volatility is making life difficult for traditional institutions.”
Fund managers are also deploying capital more rapidly than in previous years—40% of funds raised in 2024 had been invested by April 2025, compared with just 16% at the same point in 2023—suggesting a modest recovery in transaction market confidence.
Asset class and market repositioning
Sectoral preferences, too, are evolving. Residential remains the most favoured sector, with strong sentiment towards living-related assets such as student accommodation and senior living. Retail, surprisingly resilient, has seen a modest uptick, while sentiment towards logistics has softened slightly but remains positive.
Office assets, by contrast, remain in disfavour, although INREV’s latest sentiment indices suggest that negative perceptions may have bottomed out. Net sentiment towards offices rose to 0% in March 2025—the highest level recorded since March 2022—indicating a tentative stabilisation.
Geographically, Germany continues to hold its place as a preferred investment destination, particularly among non-European investors, despite its weak recent performance. Notably, Spain has displaced France among the top three most attractive European markets, driven by stronger economic growth, lower unemployment, and robust residential demand. As reported previously by REFIRE, the 2025 Investment Intentions Survey from INREV highlighted this realignment of investor focus towards more dynamic Southern European markets.
Capital stands ready, but recovery timelines slip
While many investors remain strategically committed to real estate, the general expectation is that the market recovery will take longer to materialise than previously hoped. Hopes for a 2025 rebound have been pushed back towards 2026, as both macroeconomic and geopolitical uncertainties persist.
Yet there is a growing conviction that the current environment will reward patience. Limited new supply, particularly in sectors such as logistics and alternative residential, is expected to drive strong rental growth once demand fully reasserts itself. As McCarthy noted, "we're in the midst of a recovery that's really cash-flow driven," with stabilising cost of capital providing further support to valuations.
In short, for well-capitalised investors able to focus on high-quality assets with favourable long-term fundamentals, this is a moment to position carefully—not to retreat.
Innovation, resilience, and the long game
Fittingly, the overarching theme of INREV’s conference was “The Age of Innovation.” Yet if there was one clear takeaway from Berlin, it was that innovation in the current environment is less about grand technological disruption and more about strategic resilience: ensuring transparency, enhancing liquidity options, refining asset selection, and embracing counter-cyclical sectors.
The European non-listed real estate sector may well find itself at a structural crossroads, where transparency, tenant quality, and operational agility become decisive competitive advantages. As INREV’s Iryna Pylypchuk warned, the magnitude of today’s uncertainties demands not just a tactical response, but a wholesale adaptation of investment strategies.
The road to recovery remains slow and fragmented—but the long game remains. It will favour selectivity, resilience, and an ability to act against the consensus.