Market commentary: European real estate AIFs continue to grow in 2025 despite significant outflows
The net fund assets of regulated European real estate funds (AIFs) totalled €1,048.9 billion at the end of 2025 – an increase of 1.4 per cent or €14 billion compared to the previous year. This is according to the latest figures from the European Fund and Asset Management Association (EFAMA). Growth in the number of funds also continued last year. The number of European real estate AIFs rose by 226 funds from 4,032 at the end of 2024 to 4,258 at the end of 2025.
"European real estate funds continued to record slight growth last year, albeit at a much more subdued pace than in previous years. The current figures are a first signal of a bottoming out and a gradual stabilisation of the market," says Ilva Diaco, Conducting Officer Portfolio Management, Marketing & Distribution at INTREAL Luxembourg. "We are currently seeing a selective recovery – but there is still no talk of a broad easing. The first quarter of 2026 was also characterised by increasing nervousness, especially due to geopolitical tensions, economic uncertainties and ongoing inflation concerns. Against this backdrop, the quality of assets and financing security are moving further into the focus of investors."
The differentiated view of capital flows illustrates the continuing challenging conditions. Overall, European real estate AIFs recorded net outflows of around EUR 11.17 billion last year. This corresponds to a cash outflow ratio of around 1.08 percent of the previous year's assets.
Luxembourg recorded above-average declines with a cash outflow ratio of 6.8 percent (-9.26 billion euros), while Germany was roughly in line with the European average at 1.13 percent (-3.24 billion euros). On the other hand, there were positive capital movements in individual markets: real estate funds in Greece achieved net inflows of 7.3 percent of the previous year's assets (+ 535 million euros) and in Switzerland of 4.5 percent (+ 2.37 billion euros).
