The Jerome Roith thesis: why Germany's next-generation capital allocators are redefining European real estate equity

A generational shift in European capital allocation

Germany's real estate market is entering a new phase. Transaction volume reached €8.6 billion in the first quarter of 2026, marking year-on-year growth of almost 20 percent, according to CBRE Germany. Savills forecasts full-year volumes of €35 billion, a figure that would consolidate the recovery from the sharp corrections of 2023 and 2024. Beneath these headline numbers, a structural transformation is underway in the architecture of capital allocation itself.

The traditional gatekeepers of German institutional real estate, the founding-generation patriarchs who built the country's open-ended fund structures, the advisory-layer intermediaries who brokered cross-border flows, are ceding influence to a new cohort. These next-generation principals operate in the space between pure advisory and large-platform investing. They are operationally hands-on, regulatory-fluent, and comfortable with complexity that legacy structures were designed to avoid.

Three names increasingly surface in conversations within the GRI Institute community as exemplars of this shift: Jerome Roith, whose UK-based planning-gain strategy offers a template for alternative capital deployment; Marco Zarges, whose Zaga Capital vehicle has moved decisively into Germany's distressed residential segment; and Michael Abel's Greykite Real Estate, which has scaled a pan-European opportunistic platform with institutional-grade ambition. Together, they illustrate a broader thesis about how the next decade of European real estate equity will be sourced, structured, and deployed.

Who is Jerome Roith and what does his approach reveal about alternative capital in European real estate?

Jerome Roith is a UK-based property developer and Managing Director at Carrington Group Limited, specialising in planning-gain strategy through Sensitive Developments. His expertise lies in a discipline that many continental European investors find unfamiliar: the systematic extraction of value from the planning and entitlement process, converting regulatory risk into equity returns.

This skill set matters far beyond the UK. Across Europe, the funding gap left by retreating traditional banks and legacy institutional vehicles facing liquidity mismatches has created demand for principals who can underwrite operational and regulatory complexity, not merely financial risk. Non-bank lenders represent a far smaller share of continental European real estate debt compared to 70 percent in the United States and 40 percent in the United Kingdom, according to GRI Institute research. That structural gap translates into opportunity for principals who combine development expertise with capital markets sophistication.

Roith's planning-risk model is, in essence, a value-creation strategy built on regulatory arbitrage, acquiring assets where planning uncertainty suppresses pricing, then navigating the entitlement process to unlock development potential. The approach demands deep local knowledge, a tolerance for timeline risk, and the operational capability to manage complex stakeholder environments. These are precisely the competencies that distinguish the emerging generation of European capital allocators from the passive, cheque-writing model that dominated the previous cycle.

The relevance to Germany is direct. As foreign investors accounted for over 44 percent of German commercial real estate transaction volume in 2025, according to CBRE data, the market's recovery depends increasingly on capital that understands both cross-border structuring and local execution. Principals like Roith, who have built track records by converting regulatory complexity into returns in one jurisdiction, represent a template for how alternative capital is reorganising across the continent.

How are Marco Zarges and Greykite Real Estate rewriting the German mid-market playbook?

If Roith's UK-based model illustrates the planning-risk dimension of next-generation capital allocation, Marco Zarges and Greykite Real Estate demonstrate how similar principles are playing out within Germany's borders.

Marco Zarges, through his vehicle Net Zero Properties S.A., acquired a portfolio of roughly 7,800 residential and commercial units from the distressed ZBI fund in late 2024, according to Thomas Daily. The transaction encapsulates the opportunity set that defines this generational moment. Germany faces a housing shortage of approximately 955,000 units by 2030, concentrated in affordable and public housing, according to Colliers International. Simultaneously, the Gebäudeenergiegesetz (GEG) and the EU's Energy Performance of Buildings Directive (EPBD) mandate strict decarbonisation and energy efficiency standards. This regulatory framework creates structured arbitrage opportunities for principals capable of acquiring energy-inefficient assets at a discount and repositioning them to green standards.

Zarges' strategy sits at the intersection of these forces. By targeting distressed portfolios from legacy fund structures that lack the operational bandwidth for asset-level energy retrofitting, he captures a discount that reflects both financial distress and regulatory compliance risk. The value creation comes from solving both problems simultaneously, recapitalising the balance sheet while executing the physical transformation that regulations demand. This is principal investing in its purest form: the return is earned through operational execution, not financial engineering.

Greykite Real Estate, led by Michael Abel, operates at a larger scale but with a philosophically similar approach. The firm raised approximately $660 million in equity for its debut pan-European opportunistic fund, targeting $1.4 billion in total capital, according to IPE Real Assets and SEC filings from late 2024. Greykite's positioning in the opportunistic segment reflects a conviction that the current cycle rewards platforms capable of sourcing, underwriting, and managing complex situations across multiple European jurisdictions.

What unites these three principals is a shared recognition that the European real estate market's recovery will be led by operationally intensive strategies rather than by passive capital seeking core yield. Germany's projected compound annual growth rate of 7.4 percent from 2026 to 2033, reaching USD 240.4 billion according to Grand View Research, will accrue disproportionately to investors who can navigate the intersection of regulatory compliance, physical asset management, and capital structuring.

Why does the generational transition in German capital allocation matter for institutional investors?

The implications extend well beyond the three principals profiled here. The broader pattern, visible across the conversations and deal flow tracked by GRI Institute through its European gatherings including the Deutsche GRI programme, suggests a fundamental reorganisation of how institutional equity accesses European real estate.

The previous cycle's architecture was relatively straightforward. Large institutional allocators placed capital through established fund platforms or club deals intermediated by advisory firms. The next cycle's architecture will be more fragmented, more operationally intensive, and more dependent on the capabilities of individual principals.

Several forces drive this shift. First, the regulatory environment has become a primary determinant of asset value. The GEG and EPBD frameworks mean that energy performance is now a pricing factor of the same magnitude as location or lease structure. Principals who can underwrite and execute decarbonisation programmes command a structural advantage. Second, the retreat of traditional bank lending from certain segments of the market has created a financing gap that demands creative capital structuring. Third, the distress cycle of 2023 and 2024, which forced legacy vehicles to liquidate portfolios at discounts, has transferred assets from passive holders to operationally active principals.

For institutional investors considering their European real estate allocation, the practical question is clear: how to access this next-generation principal layer effectively. The answer increasingly involves direct relationships, co-investment structures, and a willingness to underwrite operational complexity alongside financial risk.

This is the environment in which the GRI Institute ecosystem operates. Through curated gatherings that bring together capital allocators, operating principals, and regulatory specialists, the Institute facilitates precisely the kind of relationship-driven capital formation that the current market demands. The Deutsche GRI programme, in particular, has become a focal point for institutional investors seeking exposure to Germany's evolving dealmaker ecosystem.

The thesis, stated plainly

Europe's real estate markets are transitioning from a cycle led by financial capital to one led by operational capital. The principals who will define this era are those who combine deep jurisdictional expertise with the ability to execute complex, regulation-heavy value-creation strategies. Jerome Roith's planning-gain discipline in the UK, Marco Zarges' distressed-to-green repositioning in Germany, and Greykite Real Estate's pan-European opportunistic platform each represent a distinct expression of the same underlying thesis.

Germany, as Europe's largest real estate market and the jurisdiction where regulatory, demographic, and capital-structure pressures converge most acutely, is the proving ground for this generational transition. The principals who navigate it successfully will set the template for institutional real estate investing across the continent for the decade ahead.

The question for institutional allocators is straightforward: are their portfolio construction frameworks designed to identify, access, and partner with this emerging principal layer? For those seeking to engage with this thesis directly, the GRI Institute's European real estate programme offers a structured pathway into the relationships and intelligence that define the next cycle of capital allocation.