Residential investment in Europe has soared to record levels in 2021, with €21.9bn (£18.9bn) committed in the first quarter.
JLL tracked the highest level of investment into the living sector, up 2% on the same period last year.
There were €18.3bn of deals, excluding M&A, vastly outstripping the €15.9bn tracked in European offices, JLL found.
Residential BTR investment made up 71% of funds committed, with the balance dedicated to student, senior living and healthcare investment.
Germany attracted the bulk of funds at €6bn, followed by the UK at €5.5bn and France at €2.8bn.
Investment into Germany fell, after a bumper 2020 boosted by ADO Properties’ €6bn acquisition of Adler Real Estate last March. However, the UK saw more than three times the amount committed compared with the €1.6bn in Q1 2020.
In the UK, the senior living and healthcare markets saw €2.1bn committed, with €1.8bn invested in build-to-rent and €1.6bn in student accommodation. This was bolstered by Medical Properties Trust’s £800m acquisition of The Priory’s specialist centres and Lone Star’s £670m take-private purchase of McCarthy Stone.
According to JLL, more than half of European markets saw year-on-year growth.
The figures for Q1 this year are 43% above the five-year average. Some 39% of investment was focused on assets in development, up from 30% a year earlier.
Investors are also looking to increase their spend in 2021, with 59% planning to increase living investment and 85% expanding BTR investment. This follows a record year in 2020 with €83.6bn in funds going to the wider sector.
Some 78% of investors in JLL’s Living Investment Survey said lack of income-producing investment stock was a barrier to growth.
Jeremy Eddy, head of living for international capital markets, EMEA at JLL, said: “These volumes are a notable achievement for living, which began the cycle as little more than a fringe alternative sector post-global financial crisis. The numbers are testament to the robust market, and point towards the ongoing trend of investors diversifying their allocations.”
To send feedback, e-mail emma.rosser@eg.co.uk or tweet @EmmaARosser or @EGPropertyNews
