Purpose -This paper seeks to shed light on the question whether German real estate investment vehicles provide an effective hedge against inflation. To do so it aims to investigate open-end real estate funds, special funds and real estate stocks. Design/methodology/approach -Traditional approaches as well as cointegration and causality tests are applied to monthly and quarterly index data from 1992:04 to 2009:12 for the subject investment vehicles. Findings -There is strong evidence that real estate returns are almost independent from inflation in the short run. None of the investigated investment vehicles provide a hedge against expected and unexpected inflation at different lags. In contrast, cointegration tests show that real estate stocks, open-end funds and special funds do provide a hedge against inflation in the long term. Likewise, causality tests suggest that real estate performance is influenced by inflation in the long term.Research limitations/implications -The study still could not investigate closed-end funds and G-REITs. Yet, it does capture the most and comprehensive part of the indirect German real estate investment market. Practical implications -Inflation-hedging capabilities are of particular interest in periods of economic instability. Especially institutional investors with large asset portfolios seek to adjust their asset allocation to changing conditions. Originality/value -To date, research papers on the subject of inflation-hedging capabilities of real estate almost exclusively focus on REITs in the USA and in the UK. Research about the German real estate market and alternative investment vehicles is rare -partly due to a lack of transparency over the past -although international investors more and more adhere to the German real estate investment market.