Friday, 27 February 2026
Real estate continues to hold a central position in the portfolios of family offices, despite geopolitical uncertainty, regulatory pressures and ongoing structural shifts across European markets. A recent webinar held as part of the “Macro Matters – The KINGSTONE Real Estate View” series highlighted that more than half of family office wealth remains allocated to property, with a strong emphasis on direct ownership and residential assets.
During the discussion, industry representatives examined current allocation strategies, risk management considerations and structuring approaches in a changing macroeconomic environment. “Family offices operate within a stress field of macroeconomic changes and structural mega trends. What matters is how these factors are translated into a viable long-term allocation strategy,” said Maximilian Radert, Head of Product Development & Research at KINGSTONE Real Estate.
According to findings presented from the KINGSTONE Family Office Real Estate Report 2025, based on interviews with 32 family offices in the DACH region, around 80 percent of real estate investments are made directly rather than through fund structures. Dr. Tim Schomberg, CEO & Co-Founder of KINGSTONE Real Estate, described this as reflecting a broader mindset: “Many family offices see real estate not just as an investment product but as an entrepreneurial stance. Being in control and exerting influence plays a key role.”
Participants confirmed that maintaining direct oversight of assets remains a priority. Direct ownership allows for closer control over management decisions and strategic direction, particularly in domestic markets where investors feel they can leverage local knowledge and networks.
Residential real estate continues to represent the largest allocation within portfolios, with multi-family housing accounting for the biggest share. Office assets remain part of the mix but are subject to more selective screening amid structural shifts in workplace demand. Several speakers indicated that current market conditions are creating opportunities to increase residential exposure over the medium term, particularly where pricing adjustments have improved entry levels.
Real estate’s primary role within portfolios was described as stabilising, with capital preservation and steady performance taking precedence over opportunistic strategies. While selective higher-yield investments are considered, they are typically positioned as complementary rather than core allocations. Operational asset classes such as hotels or care facilities currently play a limited role in the strategies discussed.
Geopolitical tensions and regulatory intervention, particularly in the housing sector, are influencing risk assessments. Investors are factoring in international conflicts, domestic regulation and potential changes in statutory frameworks. However, these considerations have not led to a fundamental shift in strategy. Instead, participants emphasised disciplined underwriting and conservative scenario planning to ensure investments remain viable under varying regulatory conditions.
Long-term structural drivers, including demographic change, decarbonisation requirements and evolving work patterns, were also cited as key elements shaping allocation decisions. These factors are increasingly integrated into acquisition criteria and asset management strategies.
Taxation and structuring considerations remain central to decision-making. Attention was drawn to the expected ruling by Germany’s Federal Constitutional Court on inheritance tax, although no legislative change is anticipated before 2027 at the earliest. The current valuation environment, however, is seen as offering strategic flexibility for asset transfers and structuring, particularly in the real estate segment.
In terms of performance expectations, most family offices are targeting annual returns in the range of four to six percent. Safety-focused investors prioritise capital preservation, while others pursue higher returns through more growth-oriented positioning. As Schomberg noted, “Either approach is legitimate as long as it is consistently implemented.”
Looking ahead, most family offices plan a measured increase in their real estate exposure over the next year. Direct acquisitions remain in focus, with investors seeking to capitalise on the current phase of the market cycle through selective, carefully structured transactions, particularly in Germany.
