Investors to increase co-living allocations as resi focus grows
Co-living has become the fastest-growing segment in Europe’s living sector, according to Cushman & Wakefield’s European Living Investor Survey 2025. The firm’s research found that 44% of respondents expected to invest in the sector by 2028, up on the current level of 33%.
C&W pointed out that 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.
The European Living Investor report incorporated the views of institutional investors responsible for managing more than €1.4 trillion in global commercial real estate assets.
“Living investments offer stability and diversification to investors, as well as generating social value, which helps them achieve ESG-linked objectives,” said Patrick Hogan, head of EMEA living capital markets at Cushman & Wakefield.
“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.”
PBSA and PRS are top targets
Overall, the report found that 80% of investors in Europe’s living sector expect to increase their allocations over the next five years. Purpose-built student accommodation (PBSA) and the private rental sector (PRS) are their top targets. About €45 billion was invested in the European living sector in 2024.
Despite PBSA being the near-term top target for the survey’s respondents – 75% planned to increase their exposure over the next three years – only €6 billion was invested in this subsector compared to the €33 billion accounted for by the PRS segment.
However, while in 2024 nearly 90% of investors sought to deploy capital into PRS/BTR over the next few years, this has fallen to 73% in 2025.
C&W said 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.
The appetite for senior living investments has also declined, “reflecting the subsector’s relative infancy and the specialist expertise required compared to other living segments,” the report stated.
The survey also indicated that investors are most attracted to the UK and Spain has replaced Germany as the second most favoured market. France, Italy and Portugal all moved up in investors’ ranking of preferred geographies, with Ireland and the Nordics moving marginally downwards.
When living sector deal structures are compared, the percentage of investors opting for forward commitment rose from 18% in 2024 to 29% in 2025, ahead of stabilised stock and joint ventures (21% each) and forward funding (19%).
