London,
26
July
2019
|
12:20
Europe/London

CAPITAL FLOWS INTO EUROPEAN MULTIFAMILY HOUSING

Multifamily housing could become the largest sector for real estate investment in Europe

Multifamily housing is the second largest sector for real estate investment in Europe, and could become the dominant sector, according to new research by global real estate advisor CBRE.

International investors are putting record volumes of capital into multifamily housing in Europe. With €52bn of cross-border capital committed to European multifamily housing between 2015-2018, the new CBRE report Capital Flows into European Multifamily Housing, looks at the origins of this capital and the types of investor moving into this quickly maturing investment class.

Jos Tromp, Head of Research, Continental Europe, CBRE, comments:

“Multifamily housing in Europe is an evolving market with strong potential for further growth. There was a record €57bn invested into multifamily housing in Europe in 2018, but this is dwarfed in comparison to the US, which has the most mature multifamily market in the world. Investment into US multifamily grew from $22bn in 2001, to $175bn in 2018, making it the dominant real estate investment sector there. Given the strong investor appetite, and the continued supply-demand imbalance, Europe could follow a similar trajectory.”

Thomas Westerhof, Head of Residential Investment Properties, Continental Europe, CBRE, comments:

“Thematic drivers such as urbanization, housing affordability and growing preferences towards renting options are set to continue to drive investor interest into European multifamily housing. We expect there to be further internationalization and consolidation, as fund managers set up new dedicated pan-European investment vehicles and global capital is increasingly finding its way into the markets. While the bulk of international investor activity to date has been through portfolio acquisitions and platform and M&A type deals, once these actors have a foothold in Europe, it becomes easier for them to grow their holdings with single assets and spread operations across different European cities.”

Top Cities

Top Destinations for cross-border multifamily investments

Rank

City

2014-2018 total

1.

Berlin

€14.8bn

2.

Copenhagen

€11.2bn

3.

London

€7.7bn

4.

Amsterdam

€4.9bn

5.

Stockholm

€3.4bn

6

Hamburg

€3.2bn

7.

Madrid

€3.1bn

8.

Frankfurt

€3.0bn

9.

Munich

€2.1bn

10.

Dublin

€2.0bn

Top ten cities in Europe by cross-border multifamily investment volume in the period 2014-2018

Source: CBRE Research, 2019

Jennet Siebrits, Head of Residential Research, UK, CBRE, comments:

“CBRE has identified London as is a top ten destination for cross-border multifamily investments in Europe, attracting €7.7bn from 2014-2018. London accounts for the majority of the total investment volume into UK multifamily housing, although the number of deals is spread fairly evenly between London and the regions, which includes the cities of Birmingham, Leeds and Manchester.

To view the research: https://www.cbre.co.uk/research-and-reports/capital-flows-into-european-multifamily-housing