Family offices double down on direct real estate investments: Kingstone Real Estate report

Family offices across the DACH region (Germany, Austria and Switzerland) continue to maintain significant exposure to real estate, with a strong preference for direct ownership and a growing focus on residential assets, according to new research from Kingstone Real Estate.

The Kingstone Family Office Real Estate Report 2025, based on interviews with 32 family offices, found that more than half of family office wealth is allocated to real estate, underlining the asset class’s continued role as a core component of long-term wealth strategies.

The report highlights a striking structural feature of these allocations: around 80% of investments are made directly rather than through fund structures, reflecting a preference among family offices to retain control over individual assets and investment decisions.

“Many family offices see real estate not just as an investment product but as an entrepreneurial stance,” said Tim Schomberg, CEO and co-founder of Kingstone Real Estate. “Being in control and exerting influence plays a key role.”

This approach contrasts with institutional investors that typically access real estate through funds or other pooled vehicles. For family offices, direct ownership allows greater flexibility in asset management and a closer connection to the underlying property.

Residential leads allocations

Residential property continues to dominate family office portfolios. The report shows that multi-family housing accounts for the largest share of allocations at 37.5%, followed by office assets at 25%.

Despite ongoing uncertainty in commercial real estate markets, offices remain part of family office portfolios, although investors are becoming increasingly selective.

Residential assets, however, are gaining momentum as family offices search for stable income streams and long-term capital preservation. Market conditions are currently creating opportunities to expand allocations, according to investors.

The research also indicates that operator-led assets such as hotels or healthcare real estate play only a limited role in most family office strategies.

Stability over opportunism

The findings suggest that family offices continue to view real estate primarily as a portfolio stabiliser rather than a high-risk growth play.

Return expectations are relatively conservative, typically ranging between 4% and 6%, with many investors prioritising capital preservation and stable performance over aggressive value creation.

“Safety-oriented investors prioritise value retention, whereas growth-oriented players target higher returns,” Schomberg said. “Both approaches are legitimate as long as they are implemented consistently.”

Opportunistic strategies are generally used only as a selective addition to core holdings.

Family offices are also increasingly factoring geopolitical tensions and regulatory risks into their investment strategies.

International conflicts, shifting regulatory frameworks and policy intervention — particularly in the housing market — are influencing how investors assess risk and structure transactions.

At the same time, structural forces such as demographic change, decarbonisation and evolving workplace patterns are expected to shape long-term real estate demand.

Gradual expansion ahead

Despite these uncertainties, the outlook for family office investment in real estate remains positive.

Most investors surveyed expect to moderately increase their real estate exposure over the next 12 months, taking advantage of market conditions to pursue selective acquisitions.

Demand for direct property investments in particular is rising as family offices seek to deploy capital while maintaining full control over their assets and investment strategies.