Family offices worldwide are betting on real estate

The Sun

06-05-2025

KUALA LUMPUR: Family offices worldwide are increasing their exposure to real estate, recognising its potential for long-term growth and wealth preservation, according to The Wealth Report, Knight Frank's flagship publication.
Between November and December 2024, Knight Frank conducted in-depth interviews with 150 single and multi-family offices globally. The survey panel included 121
single-family and 18 multi-family offices, alongside 11 heads of more diverse structures. Representing 29 cities across Asia, Europe, the Middle East, and the Americas, participants were drawn from key financial hubs such as London, Singapore, New York, Geneva, Sydney, and Hong Kong SAR.
The surveyed family offices (FOs) collectively managed over US$84 billion in assets, with an average US$560 million in assets under management (AUM). Approximately 40% of these FOs had operating businesses with a specific focus on real estate.
Real estate allocations have increased in the past 18 months, with 28% of family offices expanding their portfolios, compared to only 17% reducing their exposure. The most prominent sectors in current portfolios include offices (20%); luxury residential (17%); industrial (14%) and hotels (12%).
Knight Frank global head of research Liam Bailey said: 'Despite ongoing macroeconomic challenges, real estate remains a key pillar of investment strategies for family offices. Our survey shows that 44% plan to increase their exposure to real estate in the next 18 months, while only 10% expect to scale back. The living sectors (14%), industrial/logistics (13%), and luxury residential (12%) are the top three areas of focus for future investments.'
Malaysia is actively positioning itself as a leading regional hub for family offices, leveraging its strategic location, robust financial infrastructure, and evolving regulatory framework. The Malaysian government is offering incentives to attract ultra-high-net-worth individuals (UHNWIs) and family offices.
According to the Malaysian Investment Development Authority (Mida), Malaysia's growing reputation as a wealth management hub is reinforced by tax-friendly policies and diversified investment opportunities. The government has streamlined regulatory processes and introduced tax incentives to encourage family office participation, particularly in real estate and private equity. These efforts aim to increase foreign direct investment and strengthen Malaysia's position as a financial hub.
Malaysia stands to benefit from the findings of The Knight Frank 150, a special family office survey conducted for The Wealth Report 2025. The survey, which included 150 global family offices managing over US$84 billion in assets, revealed that 44% of family offices plan to increase their real estate allocations over the next 18 months, with strong interest in commercial, industrial, and luxury residential properties​.
Knight Frank Malaysia Group managing director Keith Ooi said: 'Malaysia's vision of becoming a family office hub is supported by its strong real estate fundamentals and competitive investment landscape. Kuala Lumpur continues to attract wealth management firms, while Johor is gaining traction among investors seeking strategic opportunities in luxury residential and industrial assets.'
Johor is emerging as a key destination for real estate investment, driven by its strategic location near Singapore and its growing industrial and logistics sectors. The rapid expansion of e-commerce and regional trade has fuelled strong investor interest. With increasing cross-border capital flows, Johor is strengthening its position alongside Kuala Lumpur as a prime hub for family office investments.
Malaysia remains an attractive destination for family offices and high-net-worth individuals seeking diversification in real estate. The country's strong infrastructure, expanding economy, and stable property market make it a strategic choice for long-term investments.
Knight Frank Malaysia Land & industrial solutions executive director Allan Sim (pic) remarked: 'Industrial and logistics real estate emerges as one of the top sectors for family offices seeking strong and sustainable investments with a long-term redevelopment angle. Malaysia's geographical advantages and proliferating infrastructure continue to drive stable demand for high-specification and sustainable industrial facilities, particularly in Greater KL, Johor and Penang. As global supply chain continues to refine due to geopolitical uncertainty coupled with the government's effort in attracting FDIs into the country, industrial and logistics real estate should remain resilient.'
Ooi added: 'Beyond industrial assets, Malaysia continues to see strong demand for premium office spaces and luxury residences, particularly in key urban centers. Investors are drawn to well-located, high-quality developments that offer stable returns and long-term value.'
Among family offices actively involving the next generation, 47% have observed some strategic shifts, while 18% report significant changes. A clear trend is emerging where 63% of millennials have already allocated capital toward sustainable investments while only 35% of baby boomers have done the same.
These findings highlight the evolving investment landscape, with younger generations shaping new strategies, particularly in ESG-focused real estate and impact investing.
Malaysia's efforts to establish itself as a family office hub align with global trends in wealth management and real estate investment.
With strong regulatory support, financial incentives, and a maturing investment landscape, the country is well-positioned to attract more family offices seeking stability, diversification, and long-term growth opportunities.