Competition will intensify in the multifamily sector driven by the launches of new residential funds across Europe. The mismatch between the volumes of capital that will be targeting this segment and the available product, should lead to more forward funding deals and development initiatives. Rising construction costs and rental regulations can restrict returns but residential will still offer secure, long term, inflation hedged income streams. Given the urgent need for more housing in the big cities, a balanced approach through the collaboration of public and private sector is required. The markets where we expect to see further activity are:

The Netherlands, especially Randstad due to rapid urbanisation and continuing critical housing shortage. Supply will marginally cover demand.

Czech Republic, because increasing residential prices and CNB (Czech National Bank) restrictions on mortgages create demand for flat/apartment rentals. This is coupled by the younger generation shift from ownership to rental living.

Housing affordability has become an issue in the major cities of Spain too. Traditional 'build-to-sell' developers are entering the 'build-to-rent model, providing at the same time the platforms for institutional investors to enter the market through forward-funding agreements.

In Germany we anticipate solid interest in the sector, as well as a shift to subsidised housing, in response to the need for affordable housing and as a way to meet ESG requirements.

In Sweden investment in multifamily is already at record levels and interest is expected to be sustained as it is perceived low-risk segment, especially in a weaker economy. Yields are still favourable compared to offices.

In the UK demand and supply imbalances are fuelling development activity. As institutions have become more confident in 'build-to-rent' as a long-term asset the number of units being delivered at any one time has grown.