News / Insights

The joint analysis presented in the INREV and EPRA report highlights how the listed and unlisted European real estate markets represent two complementary ways of accessing the same institutional commercial real estate universe. Over the past twenty years, both segments have grown to a significant size: the assets of the unlisted market exceeded 1.03 trillion euros in Gross Asset Value by the end of 2025, of which approximately 519 billion euros were attributable to real estate equity funds, while the listed market represents approximately 971 billion euros in underlying real estate assets. Overall, the European institutional real estate market now exceeds 2,000 billion euros. The correction observed between 2022 and 2024 was cyclical rather than structural in nature: the listed segment quickly absorbed the realignment through market prices, while the unlisted segment experienced a more gradual adjustment in valuations, without compromising the depth and attractiveness of either market.

The sector as a whole has structurally reduced its use of leverage following the global financial crisis. In unlisted real estate funds, the level of leverage (“gearing”) in unlisted real estate funds fell from 39.8% in 2009 to 24.6% at the end of 2025, while the loan-to-value ratio of listed companies dropped from 44% in 2010 to 38.7%. Even the sharp rise in interest rates between 2022 and 2024 had a limited impact: despite an increase of over 400 basis points in official interest rates, the average cost of debt for listed real estate companies rose by just 91 basis points thanks to long maturities, fixed-rate financing, and hedging. According to the study, this greater financial strength stems from structural changes, including stricter regulation, greater credit discipline, and more advanced governance.

In terms of portfolio composition, both listed and unlisted sectors have followed a converging trend, gradually reducing the weight of retail and office properties in favor of residential, logistics, and alternative sectors. Retail’s share has more than halved since 2012, while residential is now the leading asset class in both markets. In the listed segment, offices and retail still account for 43.8% of the portfolio, compared to 30.8% in the unlisted segment. Both markets have also shifted their geographic focus from the United Kingdom to Germany, while offering different exposures by country and sector: the listed market provides greater access to specialized operators and higher liquidity, while the unlisted market favors diversified, multi-country strategies.

The two instruments should therefore not be viewed as alternatives, but rather as complementary: their combination allows institutional investors to build a broader, more diversified, and more representative exposure to the European real estate market.