Greystar has raised an oversubscribed fund targeting residential rental accommodation in Europe, attracting €1.55bn from institutional investors.
The US-based group had initially sought €1bn, but the shorter leases and potential for rental increases have proved attractive as a hedge against soaring inflation.
The total poured into the residential rental market has surged beyond €32bn this year, in sharp contrast to the rest of the real estate market, which has already been chilled by rising interest rates and slowing economic growth.
“Residential has historically been the best inflation hedge of all commercial real estate, because of the duration of lease,” said Mark Allnutt, Greystar’s senior managing director for Europe.
However, with inflation running at around 10% in a number of European countries, including the UK, some analysts are sceptical that landlords will be able to raise rents at a pace that safeguards returns.
In May, Greystar teamed up with Singaporean sovereign wealth fund GIC to buy student housing portfolio Student Roost for about £3.3bn, the largest UK property transaction in the past two years. The group said the new fund would enable Greystar to sustain its spending spree.
