The living sector is undergoing a significant transformation, with new homes shrinking in size across Europe due to a combination of affordability pressures, demographic shifts and changing lifestyle preferences.
Emanuele Dubini, global CIO at DeA Capital Real Estate, says this small-home revolution is making the living sector increasingly attractive to institutional real estate investors.
“The living sector will be the most relevant asset class over the next three to five years,” Dubini predicts, adding that the firm is now targeting up to 60% exposure to this sector within its international real estate portfolio. The remaining 40% will be allocated to logistics, industrial and other asset classes, including debt.
The firm will focus on one-room accommodation, for students and young professionals aged 19 to 37. These are expected to represent 70% of the group’s portfolio, with the remaining 30% allocated to accommodations with one or two bedrooms.
“Demographic change — not demographic growth — is driving the sector, creating new housing needs across Europe,” Dubini explains. As low and middle-income earners are among those most in need of housing, the company is also looking to enter affordable housing, with a new acquisition in Madrid expected to be announced soon, he adds.
“We expect the rental sector to become increasingly regulated as governments intervene to curb affordability pressures. It is important to underwrite these deals now rather than wait for governments to impose new measures,” he says.
DeA Capital entered the living sector in 2022 with the launch of a build-to-rent strategy in Spain, with total investments reaching €500m over the past four years. In late 2025, it teamed up with Invesco Real Estate and Banque des Territoires, the investment arm of Caisse des Dépôts, to launch a new student housing development strategy across France.
The partners are advancing projects representing a total of 2,000 beds in university cities including Paris-Saclay, Cesson-Sévigné, Bordeaux and Toulouse.
“We want to expand further across Europe,” says Dubini. “After France and Spain, the next step will be to leverage our newly acquired expertise in the student housing sector in countries such as Germany and Poland, where we are targeting the creation of new student housing platforms.”
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