Family Office Property Allocation and Real Estate Trends in 2025
As the landscape of wealth management evolves, family offices are increasingly turning their attention to real estate as a key strategy for diversification. In 2025, the strategic allocation of property is not merely a trend but a vital component of their overarching investment approach, particularly in uncertain economic climates. Real estate offers not only stability but also opportunities for enhanced control, substantial returns, and the potential for intergenerational wealth transfer.
Increased Allocation to Real Estate
Data reveals that approximately 44% of global family offices plan to increase their investments in commercial real estate within the next 18 months. This signals strong confidence in the stability and inflation-hedging capabilities of this asset class. Moreover, 28% of family offices have recently boosted their real estate allocations, contrasting with 17% reducing theirs, underscoring a net positive trend toward property investments.
Preference for Direct Ownership and Long-Term Value
Family offices tend to favor direct ownership over fund-based investments, allowing for greater control and a focus on long-term value creation. This approach aligns with their patient capital mindset, setting them apart from more short-term-focused institutional investors.
Focus on Stable, Income-Generating Sectors
The favored property sectors among family offices include:
- Industrial
- Multifamily residential
- Logistics hubs
- Offices
- Luxury residential
- Hotels
- Data centers
These sectors are characterized by strong demand fundamentals, limited supply, and resilience in volatile markets, making them attractive for sustainable, long-term growth.
Domestic vs. Global Diversification
While many family offices maintain a strong domestic real estate focus, with approximately 70% of investments being domestic overall, others — particularly those in Switzerland, Hong Kong SAR, and Singapore — exhibit a more geographically diverse property portfolio. This reflects a nuanced approach to global diversification strategies, adding resilience to their investment frameworks.
Global Diversification Strategy and Investment Approach
Blending Real Estate with Broader Investment Portfolios
Family offices often integrate real estate as part of a balanced portfolio that includes equities, venture capital, and other private assets. Real estate serves as a strategic asset underpinning operations and as an alternative to fixed income, protecting purchasing power while generating steady returns.
Sustainability and ESG Alignment
Sustainability is playing an increasing role in family office property allocation. Investors prioritize real estate assets that meet environmental, social, and governance (ESG) criteria. This shift reflects a growing preference for impact-conscious investing alongside traditional financial objectives.
Leveraging Technology and Data
In a rapidly evolving market, family offices are adopting technology tools, such as AI-driven market analysis, to enhance investment decision-making in real estate. This integration supports smarter asset selection and portfolio management, optimizing returns in a complex operating environment.
Responding to Market Dynamics
Rising interest rates, economic uncertainty, and stock market volatility have reinforced real estate’s attractiveness as a tangible, inflation-resilient asset class. Family offices capitalize on dislocated markets, deploying flexible, long-term capital where traditional lenders may retreat. This adaptability serves as both a hedge against market disruptions and a path for enhanced returns.
Conclusion
In 2025, family offices employ real estate strategically as part of their global diversification and investment strategies. The emphasis on direct ownership in stable, income-generating sectors is reshaping their approaches to wealth management and increasing their geographic reach. Beyond financial returns and inflation protection, investments are increasingly aligned with sustainability and ESG criteria, reflecting evolving societal values. By leveraging technology for informed decision-making and maintaining a balanced portfolio that includes diverse assets, family offices are well-positioned for success in a complex economic landscape.
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