- Cushman & Wakefield survey of institutional investors reveals 80% expect their investment in the living sector to increase over the next five years
- UK, Spain and Germany are the most preferred markets, with growing interest in France, Italy and Portugal
- Investors’ preferred funding structure is forward commitment, ahead of stabilised stock, joint ventures and forward funding
- Respondents are responsible for managing more than €1.4 trillion in global commercial real estate assets.
Eighty percent of investors in Europe’s living sector expect to increase their allocations over the next five years with Purpose Built Student Accommodation (PBSA) and the Private Rental Sector (PRS) their top targets, according to new insight from Cushman & Wakefield.
Jan-Bastian Knod, Head of Residential Investment & Healthcare Advisory Germany at Cushman & Wakefield says: "The firm’s European Living Investor Survey 2025 report incorporated the views of institutional investors responsible for managing more than €1.4 trillion in global commercial real estate assets. Their responses reveal widespread optimism for the sector’s growth prospects, driven by demographic and societal trends, a lack of supply, and regulatory shifts such as reduced focus on rent controls."
PRS accounted for €33 billion of the c.€45 billion invested in the European living sector in 2024, with a further €6 billion invested in PBSA. Yet the latter was the near-term top target for respondents, with 75% planning to increase their exposure over the next three years, attracted by its solid fundamentals, rental growth outpacing inflation and less focus on rent regulation compared to the traditional PRS market. In the UK, the Renters’ Rights Bill, exempting PBSA from the abolition of fixed-term tenancies, has also buoyed confidence.
In 2024, nearly 90% of investors were looking to deploy capital into PRS/BTR over the next few years, but this has fallen to 73% in 2025. Regulatory pressures and planning challenges continue to weigh on BTR development schemes in the UK, though the expected increase in operational and stabilised assets this year may provide new opportunities. Appetite for Senior Living also declined, reflecting the subsector’s relative infancy and the specialist expertise required compared to other living segments.
Co-living emerged as the fastest-growing segment, with 44% of respondents expecting to invest in the sector by 2028, up from 33% today. The model is well established in Germany and its expansion in the UK is accelerating, with the higher density of co-living developments helping navigate planning and viability constraints in urban locations.
Top geographic targets and deal structures
This year’s survey shows that investors are most attracted the UK, with Spain replacing Germany as second most favoured market. Beyond the top three, France, Italy and Portugal all moved up in investors’ ranking of preferred geographies, with Ireland and the Nordics moving marginally down the rankings.
Comparing preferred deal structures for the living market to last year, the percentage of investors voting for forward commitment rose most visibly (29% in 2025 versus 18% in 2024), putting it ahead of stabilised stock and joint ventures (both 21%) and forward funding (19%). Investors were also more likely to focus on repositioning (10%) as an option compared to last year which could reflect a greater flow of such opportunities now coming to market.
Patrick Hogan, Head of EMEA Living Capital Markets at Cushman & Wakefield, said: “Living investments offer stability and diversification to investors, as well as generating social value which helps them achieve ESG-linked objectives. Our survey underlines that core European markets remain a primary focus for investors at this stage of the cycle with a diverse range of capital active in the market currently, concentrating primarily on liquid European markets. As a result, we expect living markets to move into a new expansion phase during 2025.”
Tom McCabe, Head of EMEA Living Research & Insight at Cushman & Wakefield, added: “The fact that investors expect to increase their allocations to the living sector over the medium term, extending across a wider variety of segments is a promising sign for the sector’s growth and evolution. Yet nothing is perfect, and pricing mismatches, viability and political change are all causing challenges. Overall, however, the mood music is positive, with encouraging signs that investment in EMEA’s living sector is set to ramp up in the years to come.”
Cushman & Wakefield’s Living teams operate across BTR, PRS, student accommodation, seniors housing, and the wider residential and land markets providing a range of capital markets, valuation and advisory, leasing and management, consultancy and development services. Drawing on advanced data and analytical tools, proprietary research and insight, and in-depth market knowledge, they deliver holistic advice, transactions, and solutions to investors, developers, operators, landowners, and the public sector.
