A virtuous cycle is causing interest in the rented residential sector in Europe to grow massively, Samuel Vetrak, CEO, Bonard, told Real Asset Insight.
‘Increasing demand from the customer for micro living, co-living, serviced apartments and so on in turn drives investors’ interest,’ he said. ‘The investors take note of the growing demand but they also see more transparent asset classes with good yields, liquidity and now also a good track record’.
On top of this, the rented residential sector delivers steady income streams which are particularly welcome when many people are afraid that difficult economic times may lay ahead, Vetrak pointed out.
Social and demographic shifts are changing the way people live: ‘They are more mobile and more flexible, they get married later and get a mortgage later and they like living in a community, which is driving the remand for resi assets,’ he said.
Ten years after these asset classes started getting established in Western Europe, these trends are now visible across the Continent. ‘There are 426 projects in the pipeline and €15 bln to be invested,’ Vetrak said. ‘A good percentage of this is in Central and Eastern Europe, not just Poland and Hungary which are very strong markets but also Latvia, Lithuania and Ukraine. The sector is expanding in geographical terms as well as in value and liquidity’.
Most countries in the Continent like Germany, Iberia, Italy and Poland have been ‘extremely welcoming and investor-friendly’ towards these new asset classes, he said, but France is proving to be exception to the European rule.
‘France has the biggest gap between supply and demand but it seems the market is not ready yet,’ Vetrak said. ‘If and when it opens up, though, the French market has huge potential, Paris in particular’.
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