Institutional Investors Shift Focus to Real Estate Debt and Data Centers in H2 2024

In the latter half of 2024, institutional investors in Germany showed renewed interest in special alternative investment funds (AIFs), particularly in real estate debt and data centers. According to the ninth LAGRANGE Fund Monitor survey, preferences have evolved with residential, logistics real estate, and light industrial sectors also drawing attention.

The survey reported an increase in real estate AIF index score to 6.83 points from 6.25. This reflects a growing intention to invest in these assets. Investors prefer core-plus investments, which are now leading significantly over core investments. Value-add investments have seen a decline in interest.

Regions of interest include Benelux, France, US, and UK. The secondary market for AIFs is gaining traction as an alternative to the primary market. Infrastructure investments focus on renewable energies.

Financing challenges increased, but they have also accelerated investor appetite for real estate debt. The inclination to buy and sell on the secondary market has risen, with residential and logistics real estate being popular investment sectors.