• Pierre Kreemer, Partner |
4 min read

What a year…For many of us, our most challenging year yet. It’s finally behind us and now, here we are in 2021 with a fresh opportunity to set goals and intentions for the next 12 months, as well as a chance to look back and reflect on the year that was.

Don’t worry, we’re not here to talk about the (other) C-word – the one that cast a shadow over 2020. Instead, we’ve got something else under the spotlight – the 2020 Real Estate Investment Funds (REIF) Survey.

The REIF Survey by the Association of the Luxembourg Fund Industry (ALFI) was created in collaboration with Luxembourg’s leading audit firms. The 14th annual edition of the REIF Survey covers a total of 449 surveyed vehicles (of which 394 funds have the regulatory framework of an Alternative Investment Fund (AIF)) – the highest number of vehicles ever surveyed. Data was compiled by the ALFI head office and the ALFI REIF Survey Working Group (which includes KPMG Luxembourg and other professional services firms).

The main objective of this survey? To create an understanding of market trends rather than reporting on all funds. And the main takeaway? That the steady increase in surveyed vehicles only goes to show the ongoing success of Luxembourg domiciled real estate funds. They are thriving.

Now it’s time to take a closer look at the facts and figures.

Legal Forms

The latest survey not only exhibits ongoing trends, but also manifests new directions. An increasing interest in RAIFs (22% of the total population) and manager-regulated AIFs (18% of the total population) has significantly contributed to a declining interest in SIFs which represent 43% of the total population (54% in 2019). The growth of RAIFs has not slowed down and this legal form, established in 2016, shows steady growth with 98 launches in 2020 (63 in 2019).

Legal regime

Source: ALFI REIF survey 2020

Investment strategies

45% of the surveyed REIFs focus on investing into one specific sector, leaving the “multi-sector-strategy” with 42% (33% in 2019). “Residential” as a target sector with 12% accounts for the largest proportion of “single-sector-strategy” funds, followed by “retail” and “office” with 10% each.

So, where do these funds invest? Around two thirds of them invest in Europe, representing by far the strongest geographical investment focus. Considerably far behind come North America (around 9%) and Asia-Pacific (around 8%). Overall, 8% of the surveyed vehicles invest globally.

Luxembourg REIF investment regions

Source: ALFI REIF survey 2020

Fund structures

77% of the funds covered in this survey have a single-compartment structure (73% in 2019), leaving 23% with a multi-compartment structure. Funds which use a multi-compartment structure use it for separate investment strategies (43%), co-investment (26%) or both (31%).

Slightly less than two thirds of the surveyed funds (65%) are closed-ended funds (61% in 2019). This increase has affected open-ended funds with restrictions which experienced a slight decrease (from 29% in 2019 down to 25% in 2020). It will be interesting to see whether this trend will feature in next year’s edition; we have started witnessing a trend towards “retailization2” and expect more players to focus on open-ended funds as well.

Fund size and gearing

Slightly more than half of the surveyed vehicles reported a NAV below €100 million (49% in 2019) and only one third a target NAV below €100 million.

46% of the REIFs in the survey keep their gearing level below 20% loan to value (LTV) demonstrating a 10% increase compared to 2019. 43% aim to keep their LTV level below 60% (also more than last year).

Source: ALFI REIF survey 2020


Similar to 2019 survey results, around 40% of the surveyed REIFs reported a range between 0% and 0.5% for their management fee calculation. NAV is the most commonly used basis for management fee calculation (38%), followed by GAV (22%).

Management fee range distribution

Source: ALFI REIF survey 2020


Investors from Europe still hold pole position (82%), followed by investors from the Americas (10%). 90% of the REIFs in this survey are specifically set up for small groups of institutional investors (less than 25) with only 2% reporting more than 100 investors.

Almost half of the surveyed funds are distributed to only one single country, followed by 43% which are distributed to between two and five countries.


Most of the surveyed funds report their NAV under either LUX GAAP (53%) or IFRS (40%), with the remaining funds reporting under US GAAP (around just 7%). Only 39% of the funds report consolidated figures (46% in 2019).

Almost two thirds of the funds report conducting a property valuation on an annual basis, and only 22% on a quarterly basis. Almost all use an independent appraiser with RICS as the preferred valuation standards (71%).

Accounting standards

Source: ALFI REIF survey 2020

For an even deeper dive, don’t miss the full survey here!

So, after a year that has tested us like never before, we’ve seen just how resilient we can be and with more determination than ever to make things better. Now we’re ready to face the challenges of 2021 with optimism and the firm belief that the best is yet to come. It’s certainly looking that way for Luxembourg real estate funds!

Happy New Year!

This article has been written together with Oliver Collman.