In autumn 2004 FERI Institutional Management GmbH in collaboration with the Department of Real Estate at the European Business School, Germany designed and carried out the first broad interview based research study on the German institutional real estate market. Representatives of 50 German pension funds, 30 insurance, 25 financial and 11 industrial companies, with a total investment volume of app. Ä 775 billion and real estate assets of Ä 51 billion have been interviewed. The interviews focused on the current real estate asset allocation and the portfolio strategies for future real estate investments. Moreover, a competition analysis of German real estate vehicles and asset managers has been derived. The direct and indirect investments and asset allocation strategies of German institutional investors provide a valuable insight into their future investment behaviour. The study broadly predicts a further shift from direct to indirect investments. Further on, the features of institutional investment behaviour set the scene for a successful introduction of German REITs.