Since February 2026, the legal framework for open-ended property funds in Germany has fundamentally changed. The new Location Promotion Act removed tax and regulatory hurdles that had previously blocked such investments. Operating energy generation facilities had previously jeopardised tax status as an investment fund. Fund managers are now permitted to invest up to 15 per cent of their investment assets in project companies that construct or operate wind, solar or storage facilities. Furthermore, revenue from on-site rooftop systems, electricity storage units and charging stations remains exempt from trade tax.
The regulatory realignment comes at a time when conventional real estate business is characterised by high acquisition prices and falling yields. At the same time, institutional players face regulatory decarbonisation obligations and are required to measurably reduce carbon emissions across their portfolios. According to Thomas Hartauer, Chief Executive Officer of Bavarian asset manager CAV Partners AG, the reform opens up long-term revenue streams for funds that run largely independent of typical property market cycles.
Energy sites as an independent asset class
The valuation of wind and solar installations increasingly follows principles that have long been established in the property sector. The fundamental value of a project is not determined solely by the installed equipment, but to a significant degree by secured land rights, grid connection capacities and permits. As Hartauer explains, a viable energy site outlasts the operational life of an individual facility. During repowering, obsolete turbines can be replaced with more efficient new units without the site losing its function.
In parallel, buildings are turning into active components of the energy infrastructure. Commercial and logistics rooftops with photovoltaics, industrial battery storage systems or charging infrastructure create additional layers of value. Because the law also allows the use of leased space for renewable generation assets, fund managers can economically implement tenant electricity models and enhance existing properties without holding full ownership of all site parcels.
Demands on asset management
Many essential core capabilities are already present within fund management companies. These include site analysis, risk assessment, structuring and operational contract management. Even so, Hartauer believes a straightforward transfer to the energy sector is not feasible. Power markets, battery storage management and regional regulatory frameworks require specialist expertise. A pure buy-and-hold approach falls short with energy portfolios, which makes partnerships with specialised energy companies the most dependable route. CAV Partners AG is currently holding intensive talks with fund managers across the DACH region.
- —Installation of photovoltaic systems and charging infrastructure on existing rooftops
- —Minority and majority stakes in project companies within the 15 per cent quota
- —Construction of generation assets on third-party, long-term leased land
- —Investment in operational wind and solar farms to avoid development risks
For existing funds, the expert primarily recommends entering the market via operational assets, known as secondaries. Because these projects have completed their construction and ramp-up phases, return forecasts are based on real operating data. Construction delays and planning risks are eliminated. Operational investments generate predictable cash flows from the day of acquisition, a characteristic that directly matches the stable distribution expectations of institutional fund investors.
