European Living Investor Survey 2024

The "EMEA Living Investor Survey 2024" is a detailed report released by Cushman & Wakefield, a prominent global commercial real estate services firm known for its expertise in the property sector. This comprehensive survey aims to capture the trends and expectations of investors within the European, Middle Eastern, and African (EMEA) living sector. The report was crafted by a team of experts, including notable figures like Tom McCabe, Stephen Screene, and Alexandra Paulin, among others. The data for the survey was gathered in February 2024.

The living segment has seen remarkable growth, now representing approximately 20% of the European real estate market. This growth is evidenced by increasing transaction volumes and heightened allocations in real estate indices, showcasing a significant shift in investor focus toward living assets.

Investors are showing strong interest in the Private Rented Sector (PRS) and student accommodation. The report highlights that the UK and German markets are anticipated to experience the most significant benefits from a recovery in living investment volumes, indicating a regional disparity in investment dynamics.

Preferred investment strategies among investors include stabilized stock, joint ventures, and forward funding. These approaches are favored due to their potential for risk mitigation and scalability, offering investors a balanced path forward in an uncertain economic landscape.

Despite predictions of a slightly weaker economic environment in Europe for 2024, only modest reductions in interest rates are expected. Investors believe that prime living capital values will likely bottom out by the second quarter of 2024, suggesting a potential stabilization phase.

Sustainability is becoming an increasingly vital consideration for investors in the living sector. Nearly 80% of those surveyed view sustainability as a key objective for their portfolios, with many indicating a willingness to pay a premium for assets that possess strong sustainability credentials. This trend underscores the growing integration of environmental considerations within investment strategies.

A notable majority, nearly 80% of investors, plan to increase their investments in the living sector over the next five years. This anticipated influx could lead to annual investments ranging from €70 to €85 billion across the EMEA region, highlighting the sector’s robust growth potential.

The survey reflects a cautious optimism among investors, navigating economic uncertainties while identifying growth opportunities within the living sector. While traditional segments like PRS and student accommodation remain popular, there is an increasing interest in social/affordable housing and co-living spaces. The report indicates that favorable pricing alignment and a positive interest rate outlook may spur a recovery in investment volumes starting in 2024.

Overall, the "EMEA Living Investor Survey 2024" offers valuable insights into investor sentiment and strategic priorities within the living sector, emphasizing both the challenges and opportunities as the market continues to evolve.