Cushman & Wakefield
Tom McCabe, Stephen Screene, Alexandra Paulin, Joep van de Vorstenbosch, and others
2024
The "EMEA Living Investor Survey 2024," published by Cushman & Wakefield, provides an in-depth analysis of investor trends in the European, Middle Eastern, and African living sector. Key findings reveal that the living segment has expanded to represent around 20% of the European real estate market, with strong interest in the Private Rented Sector (PRS) and student accommodation, particularly in the UK and Germany. Investors prefer stabilized stock, joint ventures, and forward funding as deal structures. Despite a slightly weaker economic outlook for 2024, many investors anticipate a recovery in capital values and plan to increase their investments in the living sector significantly over the next five years. Sustainability is a crucial objective for nearly 80% of investors, highlighting a growing trend towards environmentally responsible investments. The survey reflects a cautious optimism as investors navigate economic uncertainties while recognizing growth opportunities in the living sector.
The "EMEA Living Investor Survey 2024" is a comprehensive report published by Cushman & Wakefield, a leading global commercial real estate services firm. The report provides insights into the trends and expectations of investors in the European, Middle Eastern, and African (EMEA) living sector. It was authored by a team of experts including Tom McCabe, Stephen Screene, Alexandra Paulin, Joep van de Vorstenbosch, Millie Harper, Mark Clegg, Geoff McCabe, Patrick Hogan, Andrew Smith, Jan Bastian Knod, and Luca D’Anzieri. The survey was conducted in February 2024.
Key Findings
- Growth of the Living Segment: The living segment has rapidly expanded to constitute approximately 20% of the European real estate market. This growth is reflected in both rising transaction volumes and increased allocations in real estate indexes.
- Investor Preferences: There is strong investor interest in the Private Rented Sector (PRS) and student accommodation. The UK and German markets are expected to benefit most from a recovery in living investment volumes.
- Investment Strategies: Stabilised stock, joint ventures, and forward funding are the preferred deal structures among investors. These strategies are favored due to their potential for risk mitigation and scalability.
- Economic Outlook: Despite a slightly weaker European economy anticipated in 2024, only modest reductions in interest rates are expected. Investors foresee prime living capital values bottoming out by Q2 2024.
- Sustainability: Sustainability is increasingly important for investors in the living sector. Nearly 80% of surveyed investors consider sustainability a key objective for their portfolios, with many willing to pay a premium for assets with strong sustainability credentials.
- Future Allocations: A significant majority of investors (almost 80%) plan to increase their investments in the living sector over the next five years. This could result in annual inflows of €70-85 billion into the sector across the EMEA region.
Context
The survey reflects a cautious optimism among investors as they navigate economic uncertainties while recognizing the growth potential within the living sector. The findings suggest that while traditional segments like PRS and student accommodation remain popular, there is growing interest in social/affordable housing and co-living spaces. The report indicates that improved pricing alignment and a favorable interest rate outlook may drive recovery in investment volumes starting in 2024.
Overall, the "EMEA Living Investor Survey 2024" provides valuable insights into investor sentiment and strategic priorities within the living sector, highlighting both challenges and opportunities as the market evolves.