Real Estate Survey 2025: Institutional investors favour real estate, but infrastructure is gaining in importance

Germany dominates, Europe increasingly in focus

The current portfolios of the investors surveyed once again confirm a preference for the domestic market: 63 per cent of their real estate portfolio is currently located in Germany, with a further 26 per cent in other European countries. North America and the Asia-Pacific region each account for around four per cent.

The focus for new investments is Europe, accounting for 87 percent in total. Of these new European investments, 32 percent are to be made outside Germany, while Germany's share, at 55 per cent, once again underlines the home bias. The proportion of new investments planned in Asia/Pacific and North America, at five per cent each, is slightly above the current real estate portfolio of the survey participants.

“The trend towards Europe shows that institutional investors are looking for more stable markets and broader geographical diversification. This could be due to the uncertainty resulting from geopolitical developments in recent months,” says Kurt Jovy, Universal Investment's Head of Real Estate.​

Office properties remain the most common type of property in existing portfolios, accounting for almost 37 per cent. This is followed by residential properties (21 per cent), logistics properties (17 per cent) and retail properties (13 per cent). Compared to the previous year, the importance of logistics properties has increased significantly, by four percentage points.

Planned new investments reveal shifting trends: retail properties are once again in strong demand (13 per cent compared with six per cent last year), while investor interest in office properties has declined (27 per cent compared with 34 per cent last year).

When it comes to new uses, respondents primarily envisage investing in public buildings such as schools, kindergartens and government offices (41 per cent), as well as data centres (37 per cent). 

The majority of survey participants expect property prices to rise next year in Germany (59 per cent), in Europe excluding Germany (61 per cent) and in Asia (67 per cent). In North America, however, the picture is mixed. While 44 per cent of respondents expect prices to rise, 56 per cent anticipate a decline. The expected average cash flow return for new investments is currently 4.7 per cent, representing a significant increase on the previous year's figure of 4.1 per cent. Meanwhile, 27 per cent of investors expect net initial yields of between 3.0 and 3.5 per cent in prime locations in Germany's top seven cities in 2026. Meanwhile, 36 per cent of respondents expect net initial yields of between 3.5 and 4.0 per cent, and over 4.0 per cent respectively for the coming year.

Core and Core+ continue to dominate the risk classes, with each accounting for 48 per cent. This underscores that security remains the foremost priority. At the same time, however, investors are once again willing to take on more risk. The proportion of value-add and opportunistic strategies has increased significantly, with each now accounting for 21 per cent.

“We therefore expect that the transaction markets should gradually pick up again, even though many investors are still focusing on optimising their real estate portfolios,” Jovy comments on the results.on the results.​