Assets under management for real estate investment funds (REIF) have grown since the first survey in 2005, reaching €135.9 billion in the last quarter, revealed a survey.
According to a survey by the Association of the Luxembourg Fund Industry (Alfi) in partnership with Deloitte Luxembourg, Europe – led by Luxembourg’s reserved alternative investment fund (RAIF) structure – maintains its dominance as the primary investment location and investor base for REIFs.
77% of surveyed REIFs are invested in Europe, slightly up from 2022 (75%), while Asia-Pacific and globally-focused REIFs account for 7% and 8%, respectively. Europe is the source of 81.3% of investors, with the Americas contributing 8%. Highly diversified investors increased to 6.4%, indicating Luxembourg’s sustained global appeal.
Multi-sector remains the dominant funds’ strategy at 51%, while single strategies, including residential (12%), comprise 37% of REIFs’ focus. Office strategies have steadily declined since 2020, reaching 5% in 2023.
Allocation to core strategies has risen to 33%, maintaining its position as the “largest strategy”. “Core+” and “opportunistic” categories have increased to 24% and 20%, respectively, at the expense of value-added strategies, which decreased to 24%.
Larger funds of +€400 million have decreased marginally to 34.8%, while smaller funds remain in the majority – 45.5% are sub €100 million.
Limited partnership and special limited partnership legal structures dominate, representing 59% of surveyed funds.
Christophe Masset, partner, Deloitte Luxembourg, commented: “Luxembourg still appears as a resilient location for REIFs, notably benefiting from the flexibility of its REIF framework with a notable prevalence of RAIF and as well SCS/SCSp structures.”
Emmanuel Gutton, director of legal and tax at Alfi, highlighted the substantial increase in the number of surveyed REIFs in the 2023 edition, reaching 709 vehicles, up 12% compared to 2022. “As of Q3 2023, according to data from the Commission de Surveillance du Secteur Financier (CSSF), it is revealed that assets under management have grown for 320 regulated REIFs, reflecting an increase of 3.5% compared to the corresponding period last year. It is worth noting that the CSSF data excludes manager-regulated REIF, included in Alfi’s survey,” added Gutton.
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