The prospect of rental growth is driving investor interest in the residential sector, delegates heard at the PropertyEU European Residential Investment Briefing at Expo Real on Thursday.
‘The sector’s main attraction is rental growth,’ said Eri Mitsostergiou, director of European research, Savills. ‘Resi markets have delivered attractive returns and provide a long-term income stream, with rental increases at least in line with inflation.’
Strong social and demographic trends are also underpinning the growth of the sector, experts agreed. The urbanization trend is increasing demand for housing in Europe’s cities, while the increase in prices is making buying less affordable and renting more appealing.
‘Europe’s traditional strong preference for home ownership is about to change,’ said Mitsostergiou.
Seen from the perspective of the US, a very mature market, ‘Europe is finally waking up to the opportunities of the sector, ‘ said Rick Graf, president and CEO, Pinnacle. ‘Investors’ interest has been sparked and we see a lot of opportunities in the continent.’
Residential is a city play, so investors should look at the more economically vibrant locations, that are not necessarily the largest cities. ‘The established markets have further growth potential, but opportunities can also be found in some smaller dynamic markets,’ Mitsostergiou said.
