Savills: Multi-Family Investment Volumes in Europe Reach €92.3 Billion, Up 79% Year-on-Year

Vonovia’s acquisition of Deutsche Wohnen and Heimstaden’s purchase of Akelius’ residential portfolio in Germany, Sweden and Denmark together accounted for around 40% of the total. The share of multi-family investments reached 54% of the total in Denmark, 46% in Germany, 39% in Ireland, 35% in Sweden and 32% in Finland. In all these markets, the sector was more important than offices in terms of investment volumes in 2021.

The average multifamily prime yield in Western Europe was compressed by 7 basis points (bps) year-on-year in 2021 to a record high of 3.05%. Multifamily net prime yields are 3% or less in the top six German cities (2.2%), Amsterdam, Paris (2.8%), Copenhagen and Madrid (3.0%). Net prime yields in Eastern Europe are above 4%.

Marcus Roberts, Savills Head of Operating Capital Markets Europe, said: “Global capital allocations into European real estate, and in particular multifamily, are increasing, driven by strong fundamentals and the interest rate environment. low interest.

The challenge for core investors in 2022 will be to identify stabilized assets, while more opportunities will become available for new developments and term financing deals. However, labor shortages, rising construction costs and supply chain disruptions will slow development activities.”

Eri Mitsostergiou, director of European research at Savills, adds: “One of the emerging risks in the multi-family sector is the stricter regulatory environment, which aims to protect households from rising rents. We believe that if these measures limit prospects for rental growth, they provide security for tenants, reducing the risk of frequent tenant turnover, and are suitable for core investment strategies.”

According to Savills, multifunctional mixed-use neighborhoods have once again emerged as the ideal environment for thriving communities. This can lead to more mixed-use developments, which, in addition to residential, include uses that will make them more attractive and resilient by providing, among other things, affordable housing, convenience shopping, flexible office, healthcare and The well-being.

Mary I. Bruner