Internationalisation is a key trend in the real estate business, influenced by increasing international transparency, harmonisation within the EU, and the introduction of the euro. This seems like old news, but is hot again because many investors have a backlog in achieving their objectives.

Institutional investors move from direct to indirect investing. In recent years, considerable amounts of real estate have moved to listed vehicles and private funds. Most institutional investors have drastically slimmed down their real estate departments. As increasing numbers of investors operate indirectly, the distance between the parties and the market keeps growing. Investors are channelled towards parties offering investment transactions, mainly private funds. Therefore, more and more sellers, including developers, are turning to the funds circuit.


Currently, listed real estate funds already in existence are disappearing, and the number of new listed funds is limited. On the other hand we see an increase in the private funds investing in real estate. These funds have a finite existence as well. Because some of these funds are approaching the end of their life cycles, this could set off a new wave of listed funds. This would definitely be a favourable development since the real estate market needs a large population of new listed funds in order to operate in a healthy and transparent way.

Jan Siemons is a partner at Ernst & Young