Living sectors investors focused on regional expansion

A new Savills survey aimed to gauge investor sentiment and expectations for the European Living and Hotels sectors.

Savills Investor Survey 2024 Results | BTR News
Image credit: Savills.

Savills Research and Savills Investment Management recently conducted a European Living Investor Survey, with 63 respondents who collectively have over €700bn in real estate AUM.

They are active within the Living and Hotels sectors – with the Living sectors defined as the investible universe of Residential and includes Multifamily, Single-family, Affordable Housing, PBSA, Co-living and Senior Housing).

Regional expansion

When investors were asked about where in Europe they are looking to target within the Living sectors, the UK and Ireland comes out as the highest priority market over the next three years – mirroring the trend seen in 2023.

However, there has been a change in the ranking of other priority markets compared with last year, the Savills survey found.

Southern Europe (Italy, Spain and Portugal) has risen to the second highest priority market, up from sixth in 2023.

This reflects the growing number of opportunities for investors in these markets and returns achievable compared with some more mature Northern European markets.

The DACH region (Germany, Austria and Switzerland) is now the third most sought-after location.

However, there has been a fall in the proportion of investors targeting a pan-European strategy as their highest priority, from 19% in 2023 to only 10% in 2024.

This points towards a desire by investors to focus on a handful of specific geographies where they feel they can gain a deep understanding and leverage scale within the Living sectors. 

Differences in target geographies

There are also slight differences in target geographies when comparing the preferences of European and UK-based investors.

While the largest proportion of both groups put the UK and Ireland as their highest priority market for the Living sectors, the proportion that do is significantly lower for European investors, at only 40%, compared with 76% for UK investors.

Further to this, European investors have a slightly higher preference for Western Europe (Benelux and France) and a slightly lower preference for the DACH region, according to Savills.