Stability, access and outperformance - why European residential is rising up the agenda

With strong fundamentals and a record of stable returns throughout the cycle, European residential has become increasingly popular. For a number of years, the residential rented sector has been rising up the agenda of many institutional investors. Not only has the sector recorded some of the highest returns in Europe over recent years, the perception of residential as a safe-haven investment was once again reinforced throughout the 2020 pandemic. Furthermore, with new residential markets opening up to institutional investment, the ability to access the market is also increasing, and with this we strongly believe the sector is well set to become a major part of the real estate universe.

DWS: A leading institutional investor in the living sector

As institutionalisation in the European residential market continues, investors can leverage DWS's extensive track record built over 15 years of investing in this sector for our clients. With an established local presence in key European markets, we have built a substantial portfolio across the full spectrum of Residential, Student, Healthcare and Hotel sectors for investors.

DWS has an experienced team and extensive network of market contacts, professional advisers and specialist operational partners. An investor can leverage this expertise to build out their European exposure to the 'Living' sector.

KEY TRENDS IN THE RESIDENTIAL MARKET^[3]

Specific investment themes

	Resilience: The residential rental sector in European has proven defensive at times of market stress, sustaining high levels of occupancy, more stable rents and below average return volatility.
	Increasing demand: Falling levels of owner occupation, smaller household sizes and fast growing cities support a rising level of demand for residential rental accommodation.
	Suburbanisation: regional and intra-European migration remain a key driver for urbanisation, but suburbanisation is growing in importance among existing residents, particularly young families.
	Constrained supply: Most major European cities are seeing a persistent undersupply of new residential stock, supporting high occupancy and rental growth.
	Working from home: Demand for larger residential units and "office space at home" is increasing. Due to better affordability, but also improving infrastructure and falling "commuter costs", non-central locations are expected to benefit the most.

Research - read our latest house views on the European 'Living' sector

Picture for illustrative purposes only.