Institutional investors are moving towards the living, taking this sector into consideration as a new asset class also in view of portfolio diversification. This is what emerges from the study “Residential: a fast growing asset class” by JLL, which highlights that 68% of investors at European level claim to have tried to exploit a weak offer compared to the dynamics of demand, influenced by emerging trends linked to economic, social and demographic factors such as the increase in the number of students, the reduction in the size of families, the aging of the population, the growing urbanization. 66% of investors also consider the stable flow of revenues deriving from living as a key element for future investment strategies. In 2018, the volume of Assets Under Management belonging to this category grew in Europe by 30%.
Antonio Fuoco, Head of Living Capital Markets at JLL Italia: “We are talking about a sector destined to become increasingly attractive due to the evolution of market conditions and the habits of the new generations. If in one hand the growth of prices and rates will push consumers towards rent in the near future, on the other, already today, the new generations that are more mobile and flexible – factors that will also positively affect the country’s productivity – they seem to be oriented more towards the use of houses than towards possession. These trends make living and, more specifically, residential increasingly attractive for institutional investors who are beginning to increasingly perceive this sector as a new asset class. In Europe there are already several cases in which buildings are built by institutional investors and then rented out, contrary to what traditionally happens with private individuals who build to sell ”.
With over 90 billion transacted in 2018, the Italian residential sector is the asset class with the highest market share. To date, most of the residential market has involved private individuals, with 72% of Italian families who own a home and about 50% of the household assets that are allocated in this sector. However, this is a share of very fragmented transactions that will institutionalize at least 5%. Even small investors are moving. In fact, as early as 2019, 30% of transactions registered in Milan concerned small private investors who intend to rent the apartments purchased. The Italian residential market is very dynamic on leases, with a number of contracts that exceeded 900,000 in 2018, a figure clearly higher than saleswhich reach 578,000 contracts. Milan confirms its dynamism with 4.1% of the homes sold and 7.7% located. Not too distant renting levels are also recorded in cities like Turin (7.6%) and Bologna (6.6%), which probably benefit from the high speed that can connect them to Milan in about an hour. Antonio Fuoco, Head of Living Capital Markets at JLL Italia: “Also for Italy it is an important challenge to increase the volume of institutional investments in the living. Across Europe, investors are responding to the need for a cultural macrotrend, with products structured like multi-families. In addition, investors could also consider students as potential occupants of these spaces, given the lack of housing for this specific target “.
3 october 2019
Monitor Immobiliare.it
by G.I 3.10.19