Cushman & Wakefield
2024
Tom McCabe, Stephen Screene, Alexandra Paulin, and others
The "EMEA Living Investor Survey 2024" published by Cushman & Wakefield offers a deep dive into the evolving landscape of the living sector across Europe, the Middle East, and Africa. Conducted in February 2024, this comprehensive report reflects insights from a team of experts and highlights key trends shaping the investment environment amid economic uncertainties. One of the standout findings of the survey is the robust growth of the living segment, which now makes up about 20% of the European real estate market. This surge is illustrated by increasing transaction volumes and enhanced allocations in real estate indexes. Investors are particularly drawn to the Private Rented Sector (PRS) and student accommodation, with the UK and Germany poised for notable recoveries in living investment volumes. Additionally, the report sheds light on preferred investment strategies, with a focus on stabilized stock, joint ventures, and forward funding as methods to mitigate risk and enhance scalability. Despite a slightly weaker economic forecast for Europe in 2024, investors remain optimistic, anticipating a stabilization of prime living capital values by the second quarter. Sustainability is also a critical theme, with nearly 80% of investors prioritizing sustainability in their portfolios, and many willing to pay a premium for assets with strong credentials. With almost 80% of investors planning to increase their investments in the living sector over the next five years, the report suggests a promising outlook for annual inflows of €70-85 billion into this dynamic market.
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.