When The Data Doesn’t Add up: How Fragmented Systems Are Holding Back European Real Estate

In examining the landscape for fund management as part of our global trends series, it became evident very quickly that general partners (GPs) are facing a crisis of coherence, under pressure to unify regulatory, operational, and technological data across fragmented jurisdictions.

Our first report APAC real assets: turning market friction into opportunity for investors uncovered how operational friction – from talent shortages to regulatory complexities – is defining real asset investment in Asia-Pacific. In this second report, we take an in-depth look at the European picture, with a focus on how fragmented data systems and inconsistent standards are creating significant barriers to transparency, efficiency and capital raising.

In July and August 2025, Vistra Fund Solutions partnered with Funds Global Intelligence to survey 166 professionals who work at real estate investment firms across the globe. The resulting report – ‘Data at the crossroads: How quality, governance, and AI are reshaping real estate investment management’ – clearly illustrates how data influences every aspect of fund management, performance and investor confidence. After more than 20 years working with real estate fund managers, I’ve seen this shift from data as a back office byproduct to a true strategic asset play out firsthand.

The report also identified significant challenges, highlighting how:

• 64% of GPs have abandoned strategies or halted fundraising due to poor data quality, a figure that rises to 82% within the EU.
• Legacy platforms, manual reconciliations and regulatory diversity make unified, reliable data an elusive goal
• Overcoming data fragmentation is essential to enable seamless decision-making, regulatory confidence and scalable growth

Across real estate, solutions are emerging in the form of industry-led standards, strategic technology partnerships and a sharpened focus on data governance. These developments are helping managers unlock the advantages of more reliable data, but the real challenge now is to chart the path forward.

Trends in European real estate

While data was the central focus of the Vistra/Funds Global Intelligence report, it’s important to see it in context of the recent real estate landscape across Europe, which struggled immediately in the years following the Covid-19 pandemic. Volumes and transactions bottomed out in 2023, and as IREV‘s Quarterly Fund Index chart below shows, quarterly returns during that year were significantly lower than in previous years.

The reasons for this can’t be pinned on any one specific factor, not least because we remain in a period of significant global geopolitical upheaval and economic headwinds, not least from inflationary pressures. Against this backdrop, a clear challenge for real estate is that LPs typically favour more inflation-hedged investment, such as infrastructure.

That said, the general sentiment for real estate among both GPs and LPs as we enter 2026 is one of cautious optimism – yet transaction volumes and institutional appetite recovery is slow. What we are seeing, however, is a remarkable change in the emergence of non-traditional capital coming into the market, notably among European and US family offices, high-net-worth individuals and private equity, particularly US private equity.

Those investors are, however, scrutinising real estate closely, particularly with regard to the sectors that are delivering returns. In our own recent conversations with investors, we increasingly see them probing much more deeply into how managers use data to underwrite, monitor and report on these strategies. PwC’s ‘Emerging Trends Europe survey 2026, for instance, reports that 41% of investors use a sector-focused approach when allocating capital to real estate.

According to INREV, in Q3 2025, residential funds continued to deliver the highest returns among single sector specialists, at 1.87%, followed by industrial/logistics (1.41%). And for the first time since Q3 2022, office returns were positive for two consecutive quarters. Looking forward, the PwC report identifies the sectors that offer the best prospects for 2026 as data centres, new energy infrastructure, student housing, serviced apartments and healthcare.

For GPs looking for new real estate projects, the challenge lies in how to balance the broader economic picture with investor expectations, while trying to identify the opportunities for the future – clearly while factoring in the time it takes for projects to reach completion and the risk that any given sector may have fallen out of favour by then.

As a result, managers are increasingly turning to data to help with decision-making.

“The data is out there – the challenge for real asset managers is how best to harness it.

How data is driving decision-making

The ‘Data at the crossroads’ report highlighted how the Covid-19 pandemic ‘arguably made real estate managers understand the need to embrace data sources that were wider than just interest rates and rental yields if they were to more competently risk manage their portfolios’.

Consider the granular data that could influence the decision on where to build a project in a given country, or to do so in another country altogether. Take, for example, how the cost of power and relevant infrastructure can have a direct impact on where to locate data centre projects.

As the report notes: ‘Newer forms of data even include Google Maps, which will inform GPs about the amenities available in cities and towns’. These likewise might affect decisions made around specific projects.

Decision-making extends far beyond where to locate a project. Indeed, it could easily be argued that without investors, real estate projects would never even break ground. Yet it is clear from the report that high-quality up-front data is required for LPs to make an investment decision, and ongoing reporting is required to keep them happy.

As one respondent to the survey noted: “Capital raising is much harder when the data presented to investors isn’t trustworthy or doesn’t paint a clear, accurate picture of the business.”

Clearly, data effects a host of decisions that are made around real estate funds, but the data challenges go far deeper.

“Data fragmentation creates significant operational challenges that lead to inefficiencies and increased costs. More importantly, it threatens compliance and investor confidence, putting a firm’s reputation and competitive position at risk.”

The challenges around data are significant

Data touches every aspect of the real estate fund lifecycle. And Many GPs may well feel like they’re drowning under the weight of all the information they have to source, process and output. To complicate matters further, different teams within a funds business rely on various types of data, and some datasets matter far more to certain functions than others.

This sheer weight of data seems to fall into a range of broad categories, such as:

• Data that helps managers decide where to actually establish projects
• Data that needs to be provided to investors so they can decide whether to invest (or to continue investing)
• Data that managers need to gather for onboarding investors, such as customer due diligence and for anti-money laundering purposes
• Reporting data that needs to be provided to the relevant authorities

The modern fund operates through a “data funnel”, where the speed and accuracy of inputs directly dictate the quality of strategic outputs. And herein lies a key problem.

A distinct lack of standardisation is leading to data fragmentation

The report highlights how: ‘Data standardisation underpins automation, analytics, and predictive decisioning thereby unlocking better valuation models, scenario stress testing, and portfolio optimisation. Standards mean fewer manual adjustments, reconciliations, and bespoke conversions are needed. Performance is improved, and the risk of errors reduced.’

In short, standardisation optimises fund operations and reduces errors.

The problem, of course, is that the data coming in is from all sorts of different sources, in different formats, which then has to be processed and sent out to investors or reported through different mechanisms, such as physical reports or online portals.

All of this is made more complicated for managers operating across Europe because of different jurisdictions having different rules, as well as the need to comply with regulations such as the Alternative Investment Fund Managers Directive (AIFMD).

64% of GPs globally said poor data quality had forced them to abandon a strategy or restricted their ability to raise capital – a figure that rose to 82% in EU respondents. But the issue doesn’t only lie in the data coming into the funnel.

Legacy systems, manual processes and skills gaps compound the problem

It is an open secret across the funds sector  that some managers still rely on spreadsheets for data management. But if the systems for processing data are poor, this can only exacerbate the lack of standardisation and make fragmentation worse.

Managing legacy systems, including bespoke databases, spreadsheets or siloed software is one challenge. Reconciliation between accounting systems is another. This is made all the more difficult when managers have multiple third-party providers across jurisdictions.

And where there are attempts to implement standards, it may require buy-in from multiple stakeholders, including service providers, asset managers, accounting firms and regulators.

On top of the data volume challenge is that there is a skills gap in data governance and technology. Many firms lack the talent needed to manage, govern and leverage data effectively. And this runs across the entire data spectrum – from those who choose and implement technology to those who analyse the data and extract insights once it is processed.

You can have all the data in the world, but if GPs don’t have the expertise to deal with it, they’re clearly going to struggle.

Without common standards, data can’t be compared or aggregated reliably across firms or portfolios. This lack of standardisation was cited in the report as the third-biggest barrier to using data more effectively.

“Managers need to turn to data to eke out as much alpha from their investments as possible, especially when markets aren’t favourable.”

On a positive note: opportunities are there to be seized

One of the more paradoxical set of figures to come out of the report was that 40% of European respondents (EU and UK) said the data available for deal sourcing/identifying opportunities was high quality, with 46% saying it was moderate quality.

Yet 71% of European respondents (82% in the EU alone) said poor data quality had forced them to abandon a strategy or restricted their ability to raise capital. This does seem rather contradictory.

There’s an argument to be made here that the data needed is out there and it’s generally of good quality, it’s the lack of standardisation that is problematic. Thankfully, this situation is being made easier by standards being introduced around, for example, environmental, social and governance (ESG) data, which is becoming increasingly key for decision-making, both by GPs and LPs.

Industry-led initiatives, such as INREV’s Standard Data Delivery Sheet (SDDS)are also helping by standardising the information shared between funds and investors. This enables investors to review comparable, like-for-like data across different funds, so they can make informed decisions.

Technology will be the key driver for change

But again, we come back to the issue of how to gather all the data together, assess what is relevant and then have processes, technology and people in place to analyse, consolidate, cleanse and report it to management so they can make informed decisions or push it out to investors or the authorities as required.

Unsurprisingly, the potential of artificial intelligence (AI), is very much front of mind for many GPs, with 50% of European respondents to the ‘Data at the crossroads’ report saying they expect to ‘develop, adopt, or significantly improve’ AI/machine learning over the next 6–12 months.

However, as noted by INREV in the report: “AI probably holds infinite possibilities and opportunities… but it remains an unknown quantity and what we see among our members are varying levels of adoption and understanding.’

AI is ready; the data plumbing isn’t. AI will only deliver on its promise of Alpha if it is fed by a clean, standardised, and governed foundation. And even then, the human eye needs to come in at some point to analyse any AI outputs.
At Vistra, we see two primary AI applications emerging – predictive analytics for

faster investment decisions, such as ‘agentic AI’, and process automation in the middle and back office. Organisations that don’t deploy it risk being out-operated by those that do.

“Overcoming data fragmentation is essential to enable seamless decision-making, regulatory confidence, and scalable growth. Firms that unify their data through governance and technology partnerships will transform complexity into a powerful competitive advantage.”

Five steps to data success

In a sector that is already overflowing with data, the need to gather information from multiple sources in varying formats and then analyse and assess it in a way that allows for accurate reporting and operational efficiency is only going to become more pressing as even more data becomes available or is required.

It’s important for real asset managers to note that they have little or no control over external factors such as industry standardisation, the development of AI and ever-evolving regulation. They can only look to implement data processes in the most effective manner so that data works as effectively for them as possible.

 In our work with managers across Europe, we consistently see that meaningful progress starts with getting very clear on the data you already have and how it flows through the organisation.

Here are five potential steps to harnessing data across operations, with questions you might want to ask.

• Conduct a data audit: What data are you already gathering and how are you processing it? Is your software streamlined or are you juggling multiple systems? Do you have a clearly codified approach to data governance? Are errors cropping up, and if so, where? This audit needs to be across the entire ‘funnel’ covering inputs, outputs and everything in between.
• Identify gaps/pinch points/inefficiencies: The audit should clearly identify where data isn’t working for you. This could be bottlenecks created by manual systems; duplication of effort through multiple partners; challenges delivering investor reports in a timely manner; outdated technology or software; or a lack of data expertise and the need to recruit or upskill teams.
• Carry out risk mitigation: Inaccurate data or flawed processes can result in serious risk and the potential for penalties. For example, failure to accurately report ESG data can create reputational risk. Non-compliance with regulation or inadequate due diligence can lead to financial penalties and potential criminal proceedings. All of which can cause investors to lose confidence. Attention to cyber security is absolutely fundamental here.
• Implement change: The steps above should be used to create a comprehensive and staged data change programme across the entire fund ecosystem – including people, processes and technology. What processes can be automated to create efficiencies and reduce costs? Where are the skills and technology gaps and should these be filled in-house or outsourced? This needs to be driven from the top down if it is to be delivered successfully.
• Leverage an Embedded Technology and Operations Engine: Outsourcing to specialists gives you access to expertise and best-in-class tech without the cost and risk of building in-house. Other key benefits include: risk mitigation, as third parties are experts in reporting and compliance; removal of pain points so GPs can focus on core business; access to constantly updated technology; and the opportunity to scale the operating model as the business grows. 

In conclusion

In the coming years, data and broader technology are only going to become more pivotal to success in real estate. And that success in the next cycle will hinge on mastering data architecture—ensuring the operational basics are “nailed down” so that bold, AI-driven decisions can be made with confidence.

The old mantra of ‘location, location, location’ has now been replaced by ‘location, data and technology’. Those GPs who adhere to old ways of operating are at risk of missing out on key opportunities and, ultimately, may struggle to fund raise and scale their operations.

The future of real estate fund management depends on breaking down data silos, embracing standardisation, and leveraging technology to create trust and agility in an increasingly demanding market. From my perspective, the managers who treat data as a core capability today will be the ones setting the pace in the next cycle.

How Vistra can help

Vistra remains committed to navigating this complex data landscape alongside our clients, delivering tailored solutions and global expertise that empower growth and unlock value in this new data-driven era.

As markets shift and demands intensify, the advantage belongs to those who master their data. With $1tn assets under administration, Vistra Fund Solutions has a proven track record of supporting complex fund structures, global portfolios and high performing managers with experienced specialist teams and technology.

We bring structure to disparate datasets with disciplined data governance and real time reporting, giving you a single, reliable view across portfolios, jurisdictions and asset classes.
We work with both large and emerging real estate managers, supporting you across the full real estate investment lifecycle from structuring and onboarding to ongoing administration and reporting. Our teams combine sector insight with operational rigour, turning complex information into decision ready insight so your data becomes a sustained strategic advantage.
Contact Vistra Fund Solutions to discuss how a more coherent and disciplined operating model can support clearer decision-making, credible reporting, and sustained investor confidence across real asset strategies.

Marc Harris

With more than 20 years of experience in fund services, cross-border client leadership, and M&A transformation, Marc Harris leads Vistra’s Real Assets business across EMEA. He is responsible for driving the region’s commercial strategy and ensuring the delivery of seamless, scalable solutions for global real estate and infrastructure fund managers.