New research from JLL has revealed that the incipient living asset class – which brings together student housing, co-living, multifamily and healthcare real estate assets – is predicted to achieve 30% growth this year across Europe.
According to the inaugural JLL European living survey, eight in 10 investors are looking to expand into new European markets, which could inject as much as €40 bn of new capital into the sector, which last year reached €69 bn.
'The investment landscape in Europe is changing, with demographic, social and economic drivers bringing greater focus on living asset classes,' said Guy Grainger, CEO, EMEA, JLL.
The success of living is being led by investors looking to capitalise on changing demographics, such as increasing student numbers, declining household sizes, urbanisation and an ageing population, according to JLL.
Based on current investment allocations, multifamily is the most popular sector within living, although 75% of survey respondents expect investment volumes for co-living to increase at the fastest rate.
The report also reveals investor commitment to socially-conscious real estate assets. Sustainability is set to influence living investment decisions, with 80% of respondents agreeing that capital allocations will have greater exposure to sustainable assets.
UK in the living lead
Based on current and intended investment, the UK is the most appealing market for living, with 79% of investors either already invested or targeting the country as a growth market.
The most in-demand markets for new investment are France, the Netherlands and Sweden, closely followed by Spain and Ireland. Around 82% of investors have opted for direct investment into living as their route to market while 38% use private real estate funds.
Adam Challis, head of JLL's EMEA living research and strategy, said: 'Set against the backdrop of macroeconomic and political headwinds, the story for European real estate markets remains strong. Within this context, living has emerged as one of the most exciting opportunities in the region.
'Our survey is the first of its kind and a key platform to anticipate the market evolution. The results indicate growing appetite for this asset class in Europe, and we predict that living is set to experience strong continued capital inflows in 2019.'
The JLL European living survey is based on a survey of more than 50 global investors representing over €3.2 trillion in assets under management.
