According to a survey conducted by Savills Investment Management and international real estate advisor Savills*, involving real estate investors with total assets under management (AuM) exceeding €700bn+, these investors alone will be looking to allocate €63.8bn to the European Living sectors over the next three years.
Almost half (48%) of respondents are predicting the proportion of their AuM allocated to the European Living sectors to increase significantly by 2026. This is up from 41% of respondents last year. 54% expect to have over 50% AuM in Living by 2026, while 41% expect to have over 75% AuM.
In terms of specific Living sectors, the highest priorities for investors are:
- Multifamily – 84% (73% last year)
- PBSA – 63% (65%)
- Single Family – 49% (43%)
- Co-Living – 39% (51%)
- Private investment in Affordable Housing – 39% (38%)
Andrew Allen, Global Head of Research, Product Strategy and Development at Savills Investment Management, says: “Investors are understandably focused on the Living sectors and recognise the considerable supply and demand imbalances and consequences for growth, as well as the sectors’ strong underlying drivers. Investors can also be seen to be focused on the more mature segments of Living, namely multifamily and PBSA.”
Marcus Roberts, Head of Europe - Savills Operational Capital Markets, says: “The Living sectors became the largest real estate investment market in Europe in 2023 and we expect it to continue to grow its share of total investment over the next few years.
“Given the amount of capital chasing the sector and the limited amount of high quality stock available, investors will continue to compete for the best assets in the best locations. We also anticipate seeing investors take advantage of readjustments in pricing on certain assets.”
Richard Valentine-Selsey, Head of European Living Research & Consultancy at Savills, says: “While it is fantastic to see investors looking to continue investing in the European Living sectors, it is now up to governments to ensure that unintended consequences of regulatory changes don’t derail their aspirations. Access to stock and scalability remain challenges for the industry, but as Europe’s markets continue to mature, we expect to see established and new players increasingly investing across borders.”
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*the survey was run between 7th February 2024 to 6th March 2024 and drew responses from 63 investors