An increasing number of European investors are looking to the private rented sector as a suitably stable place to make medium term investments. And alongside established mainland markets, they are turning their attentions to the activity in the UK market.
Among them is the German insurance sector, which is increasing its allocation to property from 7.3% last year, to 7.7% in 2014, according to a report from EY Real Estate. Consolidation is taking place in the German residential rental market, with listed company Adler Real Estate receiving shareholder majority approval for its takeover of fellow German company Estavis, and the acquisition of a further 7,700 homes from seller Swiss Corestate. This grows Adler’s residential portfolio to nearly 25,000 units.
Some commentators are now suggesting investment values in the German residential market have strengthened too far in key urban German locations. Outside the main cities, prices are less strong, but other options include the Dutch market, which offers medium term appeal, as well as the possibilities offered by the growing UK institutional market.
In Holland, Bouwinvest has purchased a further 572 Dutch apartments, paying EUR150 million for a package of properties in Amsterdam, The Hague and Rotterdam. And Dutch pension fund manager APG has said it will increase its investment in residential across Europe, following a recent injection of EUR550 million which saw it buy a 22.8% stake in Finnish and Russian housing specialist SATO.
And alongside a recent investment in the UK private rented sector, with backing provided to Fizzy Living, Abu Dhabi investors are also backing the German residential market. The Abu Dhabi Invesment Authority recently bought a 13.4% stake in listed German housing company Deutsche Annington.