European listed and non-listed real estate are not two asset classes but two routes into one - institutional-grade European commercial property.
The latest research, 'One Real Estate Universe: Combining Listed and Non-Listed Routes in European Institutional Real Estate Portfolios', draws on close to two decades of data from the index families maintained by EPRA and INREV. The first report of this type, which the two organisations have produced jointly, traces how the two institutional routes have evolved and where they differ.
The central finding is that listed and non-listed real estate are best understood as complementary: each has reached institutional scale, both have de-leveraged structurally since the global financial crisis, and each reaches parts of the market the other cannot fully replicate.
Download the full paper HERE and check the key highlights below:
- Combined, the European non-listed and listed real estate universe is now just above the €2.0 trillion threshold. The growth of European real estate has not only been a story of capital flows, but also a story of market infrastructure.
- Each segment has carved its own distinct path to institutional maturity over the past two decades, and the report examines how their structural differences - in leverage, country and sector composition, valuation methodology, liquidity and risk-return behaviour - determine the complementary roles they can play within a broader portfolio.
- Lower leverage is key, confirming a notable structural reset since the global financial crisis. This means that lower leverage is now embedded in the funding model, reporting framework and governance expectations for real estate overall. The key takeaway is that while sector and country-level leverage is informative, it is insufficient on its own. What investors need to consider for the next cycle is that the leverage risk is now more granular.
- At a sector level, portfolios have rotated sharply away from retail and offices since 2012. At just under 30% share, residential is now the largest sector for both, while retail has halved. At a country-level, Germany has displaced the UK as the largest market exposure in both listed and non-listed. The routes to market, however, are both different and complementary.
INREV and EPRA would like to thank Dr Alexandra Krystalogianni for her work in producing this paper.