The Knight Frank 150: Global family office investment strategies
As part of the Knight Frank Wealth Report 2025 , our survey of 150 family offices found that investors are keen to broaden their exposure to real estate, a sector offering both growth potential and wealth preservation.
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Our family office (FO) panel covered 121 single-family and 18 multi-family offices, as well as 11 heads of more diverse structures. The FOs were headquartered in 29 cities across Asia, Europe, the Middle East and the Americas, with strong representation from FOs based in London, Singapore, New York, Geneva, Sydney and Hong Kong SAR.
Assets under management (AUM) averaged US$560 million, totalling more than US$84 billion across the 150 FOs. Around 40% of FOs surveyed had operating businesses with a focus on real estate within their portfolios.
Real Estate's strong role in Family Office portfolios
Real estate features strongly in the portfolios of the FOs surveyed: direct real estate was the third most common allocation, behind equities and cash, with indirect real estate investment coming in seventh place.
Allocations to real estate rose over the past 18 months, with 28% of FOs increasing their allocation, compared with 17% reducing their exposure. The top real estate sectors for current allocations are led by offices (20%), luxury residential (17%), industrial (14%) and hotels (12%).
Some 70% of real estate investment is domestic, with the most domestically minded FOs based in New Zealand (93%), Australia (90%) and the US (86%). The most geographically diverse portfolios are those of FOs based in Switzerland (31% domestically invested), Hong Kong SAR (33%) and Singapore (41%).
Key Family Office real estate investment strategies and goals for 2025
Most respondents view real estate as one component within a broader investment strategy, balancing it alongside listed equities, venture capital or other private investments. Some continue to hold real estate for core commercial operations and see it as a strategic asset that underpins FO activities. For others, real estate is treated as a fixed income proxy, held long term to protect purchasing power and provide stable returns. Key insights from our panel include:
The preferred real estate investment strategies:
- Opportunistic (32% of respondents)
- Value add (30%)
- Core (16%)
For most FOs, real estate investment is viewed as a medium- to long-term strategy, with few investments made with a sub three-year time horizon.
The preferred duration for real estate investments:
- Up to three years (3%)
- Three to six year (32%)
- Six-to-nine-year (28%) horizons
- Nine years or more (37%)
The most popular investment routes:
- “Solo” direct investment (34%)
- Fund (19%)
- Joint venture (13%)
The most effective metrics to measure returns:
- Total return (31%)
- Internal rate of return (31%) metrics.
Across the different metrics employed, FOs on average target an unleveraged 13.8% return.
The objectives that real estate fulfils within the portfolio:
- Growth and capital appreciation (42%)
- Wealth preservation (23%)
- Income generation (19%)
The objectives that dominate real estate investment:
- Capital growth
- Wealth preservation
- Income generation
Family Office Management of Private Residential Properties: Objectives and Acquisition Plans
Nearly two-thirds of FOs manage private family residential properties. The main objectives for this management are Family use and legacy (44%), Capital preservation (29%) and Diversification (20%), with Potential rental income coming in last at 7%.
On average, those FOs managing private family residential properties are responsible for 4.7 properties, ranging from five in Latin America to 4.2 in North America.
Of those with an active family residential portfolio, 25% are considering the acquisition of property over the next 18 months, and 20% are considering a disposal of homes.
Family Offices’ cautious optimism: Increasing real estate exposure amid economic uncertainty
While our respondents see opportunity in real estate, and on balance want to increase exposure, there is a note of caution in the responses received. There is a desire from some to exit specific deals, where problematic loans or projects that no longer align with broader strategy need to be managed.
Although most respondents see opportunity in a medium-term upturn in the real estate cycle, they remain cautious about the speed of interest rate cuts and high building costs.
Despite concerns over the macro environment, 42% of respondents expect to increase their exposure to real estate over the next 18 months, compared with only 10% looking to reduce their investments.
Top real estate sectors in demand for Family Offices: Living, Industrial, and Luxury Residential
In terms of sectors in demand, the top three targets across our panel of FOs are:
- Living sectors (14%)
- Industrial/logistics (13%)
- Luxury residential (12%)
Family offices are interested in additional real estate investment opportunities, with living sectors, logistics, luxury residential and hotels leading the pack.
While most respondents felt they wanted more rather than less exposure to real estate, there are several challenges that FOs face in meeting these investment objectives.
- Difficulty in identifying reliable partners or operators (23%)
- Challenging tax regimes (20%)
- High competition for assets
- The need for speed to access opportunities (19%)
- Regulatory and compliance barriers (17%)
To find out more about global family office investment strategies, including who the decision makers of the future are, download The Wealth Report:
Download the full report