Real estate funds worldwide at 4,810 billion and growth continues

Institutional investment in Italian real estate grew by over 55% since 2023 and passed the ten billion euro mark. The recovery involved all major sectors, particularly retail, hospitality and alternative sectors. The outlook for 2025 remains positive, according to Scenari Immobiliari and the opinions of the main asset management companies.

In this context, the Italian real estate fund segment continues to grow strongly: its weight on the rest of the European vehicles amounts to more than 13%, with a Nav reaching EUR 121.5 billion at the end of 2024, up 6.6% on 2023. Real estate assets held directly by the 675 funds active in Italy are also on the rise, rising to EUR 139 billion (+6.1% over the previous 12 months). By 2025, Nav is expected to increase by 5.3% and assets by 5%, with the number of vehicles possibly approaching 700.

The indebtedness of the fund system, at EUR 59 billion, also improved slightly, coming close to 43% as a percentage of assets. The performance (Roe), however, while representing the average of very diversified realities, fell ten basis points to 1.8 per cent.

The characteristic feature of Italian managed brick and mortar is still stability. As reported in the Bank of Italy's 'Financial Stability Report' of April 2025, 'Unlike most European funds, under current regulations Italian funds are set up in closed-ended form and are therefore not subject to the liquidity risk arising from high redemption requests. The risk that at maturity the valuations of the funds' real estate portfolio diverge significantly from market values is confirmed to be low'.

"Even though the macroeconomic and political scenario is affected by uncertainty, the real estate sector is reacting well. Not least because it is in its nature to be countercyclical. In particular, the motivations that are shifting investments from the US to Europe, which is more stable, are driving further development of the market _ commented Mario Breglia, president of Scenari Immobiliari, opening the conference presenting the Report _. In Italy, the real estate market has returned to expansion with an acceleration in prices above consumer inflation, with the reduction in interest rates stimulating demand for mortgages. The outlook for the rest of the year is positive for all sectors and this contributes to the wellbeing of real estate funds'.

The total turnover of national SGRs is estimated at 420 million euro in 2024, with approximately 1,220 employees (of which 600 women and 620 men). Assets currently amount to 139 billion euro held by 60 Sgr and 675 real estate funds. The top 25 Sgr by number of real estate funds under management own around 650 vehicles, more than 97% of the total.

"The asset allocation of Italy's managed assets has seen the weight of the various sectors vary, with residential and receptive sectors growing _she underlined Francesca Zirnstein, general manager of Scenari Immobiliari_. The outlook for 2025, based on the indications gathered from the asset management companies participating in our report, is one of cautious optimism, with an increase in assets under management and diversification of portfolios compared to their current composition".

In the Old Continent, as mentioned, the expansion phase of real estate funds continues, growing both in number and assets, with 2,007 funds and 258 Reits active, for total assets of EUR 1,650 billion, up 3.1 percentage points. The weight of European funds on total assets remained stable at 34.%, while increasing in volume, confirming the positive cycle recorded in recent years.

Narrowing the field to the five main European countries (including the UK), 2024 turnover is reported to be over EUR 942 billion, up 3.5 percentage points on the previous 12 months, and further consolidation is estimated for 2025, with volumes expected to exceed EUR 991 billion. Germany continues to account for more than a third of the total volumes (EUR 314.2 billion), closely followed by France (EUR 214 billion), with Italy recording the highest growth in turnover (over 6.6% to EUR 151.9 billion) followed by Spain (6.4% to EUR 117 billion).

As many as seven German, two French and one Swiss open-ended funds appear in the top ten funds by asset value, with assets ranging from EUR 4.7 billion at Primovie to EUR 18.5 billion at Deka Immobilien Europa, which confirms its place on the podium for the fourth consecutive year. Hausinvest fell to third place with its €16.1 billion in assets, overtaken by UniImmo with €16.15 billion in assets under management. Together, the ten leading companies manage assets of more than EUR 106 billion, which represents about 12% of the European total. No Italian funds appear in the top ten; the size of our funds is much smaller, partly because they are mostly reserved funds.

Real estate assets held by Reits on a global scale grew by 3.6 per cent year-on-year to close to EUR 3,650 billion. "The success of Reits, which are suitable for a diversified clientele, depends essentially on their ability to generate good returns and regular dividends, as well as being less constraining than direct commercial real estate investments," explains the report by Scenari Immobiliari.

On a global level, the overall trend was mixed: the expansionary phase of the United States and Australia, which grew by about ten points in terms of capitalisation, was contrasted by a sharp drop in volumes in Asia and Canada (with differentials of minus 9.5 and minus 13.5% respectively). Sharp increase for South Africa, which improved its capitalisation by more than 25 percentage points. Smaller realities such as Dubai and Israel, which weigh less than 1% on a global scale, saw their volumes grow exponentially.

The United States, with a growing capitalisation of around EUR 130 billion, firmly retains the lead in the group of great powers, strengthening its weight in the global listed market even in the face of a reduction in the number of vehicles by one unit. Compared to 2023, capitalisation recovered 10.4 per cent from EUR 1,240 billion to EUR 1.4 trillion. The average capitalisation, despite the number of vehicles continuing to decline, rose again due to the increase in the market cap, from EUR 7,130 million in 2022 to EUR 7,920 million (in 2021 it had jumped to EUR 7.7 billion from EUR 5.2 billion in 2020).

Asia, despite a reduction of about 10% in terms of capitalisation, remains in second place at just over EUR 200 billion. The number of vehicles rose from 232 to 237. Its total weight in the world capitalisation of 10.7 per cent is, together with Australia and New Zealand (Asia-Pacific segment), almost double that of the European continent (8.8 per cent).

European Reits are confirmed as the third largest in the world market, the gap, which has progressively grown over the years in favour of Asia, continues to slow down in the last two years. Capitalisation loses over ten billion euros (minus 5.9%) compared to the previous 12 months and is close to 170 billion euros (it had reached 215 billion euros in 2021). The number of vehicles falls to 258 (down eighteen) and the average capitalisation remains more or less stable at EUR 656 million.