According to Savills report on Themes for European Property in 2016, record investment of €235bn in 2015 has strengthened confidence in the occupational market, bringing further appeal to the European commercial real estate market in 2016. The total investment volume in 2015 was up 17% on 2014 and above the pre-recession peak. Marcus Lemli, head of investment for Savills Europe commented: "Investment volumes will be spread more evenly across the continent in 2016, as investors actively seek to diversify their portfolios.”
The interest in non-traditional assets has grown over the past few years as investors seek secondary assets in non-core locations in order to avoid fierce competition for highly priced traditional assets. "What is principally fueling investor interest however are the inevitable demographic changes across the continent," comments Lydia Brissy, Director of European Research at Savills. "The ageing population in Europe and the profile and affluence level of ageing 'baby boomers' means that there is a need for more and improved healthcare facilities." Investing in private clinics and care homes is a trend that has already emerged especially in markets with above average affluence levels, such as the UK, Germany or France, as investors are taking advantage of the opportunity to secure long term income streams.
The shift towards this diversification is also due to extensive urbanisation and the demand for affordable ‘micro-living’, especially in Europe’s megacities. As a result, institutional investment in residential property, such as student housing, has continued to attract healthy levels of investment over the past 12 months, particularly in cities with large student communities in the UK, The Netherlands and Germany.
