Large deals drive European living investment rebound

Investment in European living real estate rose 19% in 2024 to some €53bn, following a final quarter surge, new figures from JLL reveal.

Transactional volumes of €16.8bn in Q4 reflect a 31% rise on the same period a year earlier, although still 43% below the previous five-year (2019-23) average.

The majority of Q4 investment, 58%, came from deals over €100m in size. This is the highest share since Q4 2021, as buyers and sellers held off larger transactions over the past two years of uncertainty.

These larger deals, predominately in multifamily, reflect a revival of established markets including Germany and Sweden, which have begun to bounce back following four quarters of stable yields.

Overall in 2024, forward investment rose 39% year-on-year, as investors homed in on purpose-built product, despite challenges in development and high construction costs. Notable growth here came from Germany and Spain.

The UK was the largest market accounting for 30% of annual investment, followed by Germany at 20% and the Netherlands at 8%.

On a sector level, the most substantial annual increase was in multifamily rising by €9.9bn or 43% to €32.6bn. PBSA, later living, single family and coliving all experienced strong year-on-year rises, as investors pursued a variety of living strategies tailored to demand.

Gemma Kendall, head of EMEA living investment at JLL commented: "The resurgence of large-scale transactions we experienced in 2024 is expected to continue into 2025, with a particular focus on platform deals. Investors are increasingly recognising the value of established operational platforms that can deliver economies of scale, growth potential, experienced teams and consistent returns.

“Key markets like Germany, the Nordics, Spain, and the UK remain attractive to a range of investors due to their liquidity and operational potential. We're also seeing a growing interest in specialised subsectors, such as affordable housing, co-living and age-targeted living solutions, as investors seek to diversify their portfolios and tap into demographically driven demand.

“While challenges persist, particularly around development viability, the overall sentiment is positive. The anticipated stabilisation of interest rates is likely to unlock further capital, potentially leading to some significant portfolio trades in the coming months."

Emma Rosser, director for living research, EMEA, added: “Investment is responding to improving sentiment and striking unmet demand. An uptick in forward transactions is positive, although much more is needed to begin to tackle the undersupply.

“Going into 2025 various significant portfolios and strategies already in progress will support accelerating growth, expected to drive European living investment in excess of €60bn this year.”