Europe has seen dramatic growth in multifamily housing investments in recent years. This is driven by the rise in international capital and a changing capital base. While domestic capital remains active, cross-border investors are drawn to European multifamily housing as it offers attractive fundamentals for growth.

STEEP GROWTH IN MULTIFAMILY HOUSING INVESTMENTS IN EUROPE
Investment volume in multifamily housing in Europe

Source: CBRE Research, 2019

RISE IN INTERNATIONAL CAPITAL TARGETING EUROPEAN MULTIFAMILY
Total cross-border capital into European multifamily housing*

Source: CBRE Research, 2019
*Excluding France

TOTAL CROSS-BORDER CAPITAL INTO EUROPEAN MULTIFAMILY HOUSING 2015-2018



Origins of Capital

The most active cross-border capital source into European multifamily are North American investors. This is a mix of private equity-type investors from the US and REIT-type vehicles from Canada. Within Europe, investors are increasingly comfortable with investing abroad after having built sizeable portfolios in their home markets.

DIVERSIFICATION OF CAPITAL FLOWS
Cross-border investments in European multifamily housing by region*

Source: CBRE Research, 2019
*Excluding France

HIGH DEMAND FOR EUROPEAN MULTIFAMILY FROM US AND UK INVESTORS
Top 5 sources of cross-border capital into European multifamily*

Source: CBRE Research, 2019
*Excluding France


Investor Type & M&A activity

In 2018, REITs and listed funds have deployed most capital into European multifamily housing. This is largely driven by a consolidation trend in the multifamily market which was illustrated by growing M&A activity.


REITS AND INVESTMENT MANAGERS MOST ACTIVE INVESTORS INTO EUROPEAN MULTIFAMILY HOUSING
European cross-border multifamily investments by investor type*

Source: CBRE Research, 2019
*Excluding France


Top cities

The cities that have attracted most cross-border capital are Berlin, Copenhagen and London. The top ten features two types of cities: cities with rapidly growing multifamily investment markets such as London, Madrid and Dublin; and cities with a longer established history in multifamily investments such as Berlin, Copenhagen and Stockholm.


TOP DESTINATIONS FOR CROSS-BORDER MULTIFAMILY INVESTMENTS
Top ten cities in Europe by cross-border multifamily investment volume in the period 2014-2018

Source: CBRE Research, 2019


Investor preferences

One of the key characteristics of the European multifamily market is the large share of portfolio sales relative to other real estate sectors. For cross-border investors their appetite for scale is most pronounced, motivated by the demand to quickly establish platforms and deploy capital.


STRONG PREFERENCE FOR PORTFOLIO TRANSACTIONS BY CROSS-BORDER CAPITAL
Proportion of portfolio sales versus single assets in total European multifamily investment volume in 2018*

Source: CBRE Research, 2019
*Excluding France

PREFERENCE FOR LARGER TICKETS BY CROSS-BORDER INVESTORS
European multifamily investment volume in 2018 by size bracket*

Source: CBRE Research, 2019
*Excluding France