Savills News

Savills: multifamily investment activity reaches €40bn in Europe for first time and expected to grow further

According to Savills latest research, multifamily investment reached €40bn in 2018 across the eight European markets that the international real estate advisor monitors, the highest figure ever recorded for the sector and 26.6% higher than 2017.

 In half of the markets, namely Denmark, Sweden, The Netherlands and Spain, the volume of multifamily investment was higher than offices, making it the preferred property investment segment for the first time on record.

Eri Mitsostergiou, Director, Savills European Research, says: “What historically has been considered an alternative sector to commercial real estate now accounts on average for 17% of the total investment, up from a five year average of 13%. The largest market was once again Germany with €15.1bn of turnover, the third highest volume of the last ten years. However the markets with the highest annual changes were France, which grew from less than €200m in 2017 to almost €3.2bn in 2018, Ireland where investment volumes increased tenfold to €1.1bn and Spain where the turnover jumped from less than one million to over €3bn last year.”

Marcus Roberts, Director, Savills Operational Capital Markets, says: “The attraction of long-term income streams and the anticipation of future rental growth on the back of rising demand for rental homes and restrained supply have been the main drivers behind the growth of the European multifamily investment sector. We expect this trend to continue and we see the share of the multifamily sector rising up to 20% of the total investment activity in most markets in the medium term. This will be supported by the general shift of investors towards income producing assets and sectors whose fundamentals are driven by structural change rather than cyclical factors.

“Portfolio sales and rising development activity will bring more product to the market, which in combination with a wider investor base should result in higher turnover levels especially in the markets that come from a lower base. There is growing potential especially in France, UK, Spain and Ireland.”

Download the full report here

 

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