Europa Capital is targeting more opportunities in the residential sector in Europe this year, after investing €380 million – 80% of its total investment activity – in the asset class in 2020. The real estate investment manager believes that the urbanisation trend will underpin the need for housing in 2021.
After three years of being a net seller, in 2020 Europa Capital was a net buyer, transacting close to €500 million selecting opportunities in a market made uncertain by the coronavirus pandemic.
The majority of transactions, including the largest sale, were in the residential sector, which the company believes presents value across the risk/reward spectrum and aligns with its clients’ return expectations.
‘Despite Covid-19, we believe the trend of urbanisation, and the associated demand for housing and distribution space, is here to stay’, said Rob Sim, Managing Partner, Europa Capital.
Deals were signed in London and Copenhagen, adding to Europa Capital’s long standing track record in the living sector, into which it has invested €1.2 billion into purpose built PRS and student accommodation, totalling more than 10,000 beds, since 2012.
‘Living and logistics remain preferred sectors for us in 2021, having proved durable and resilient from both an occupier and capital performance perspective in 2020,’ said Jason Oram, Executive Committee Member, Europa Capital. ‘Our rent receipts across the entire portfolio, including offices, have been high and we continue to believe in the long term outlook for offices and the contribution they make to their occupiers. Our experience of investing through multiple economic cycles means we are in a strong position to identify compelling opportunities for our clients in 2021’.
Having entered the start of the pandemic with no legacy assets and almost €600 million of investor commitments, Europa Capital’s latest value-add fund commenced investment activity focusing on the logistics sector in Germany and the Netherlands. This expands on the thematic strategies of its prior value-add strategies, which have successfully capitalised on the strong demand for logistics space due to the rise of e-commerce and businesses looking to locate close to major urban areas.
Europa Capital also continued to diversify its range of investment products, completing a first close of the Europa Diversified Income Fund, raising €350 million of equity, most of which is invested in residential and logistics.