Investing in residential real estate 

PERE’s 2024 Residential report explores how institutional capital approaches the sector

Global trends are reshaping the real estate landscape as residential – long considered a solid investment – is beginning to show cracks. The supply shortage in markets around the world is front and center for many industry participants. And while headwinds remain, the opportunities are many for investors and managers willing to face them.

INSIDE THE RESIDENTIAL REPORT

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Each of the last two years have set records for residential real estate fundraising as the sector has demonstrated its resilience, continuing to offer high risk-adjusted returns with low volatility. The sector is also supported – on both sides of the Atlantic – by a shortage of housing supply. As PERE’s latest residential real estate report confirms, the outlook is strong. Another record year could be on the cards.

Urbanization, changing demographics and migration are transforming residential real estate. Last year’s strong performance – with new multifamily records made in European investment as well as US rent growth and net absorption – has continued into this year, and emerging markets such as Brazil and China are attracting attention alongside the more established US and European rental assets, with a wide world of investment opportunity providing plenty to get stuck into.

Shelter typically ranks below only food on an individual’s list of priorities, so whereas hotel, office and retail real estate have been left reeling by covid-19, it should come as little surprise that residential has proven relatively resilient. Rather than curtailing development, covid-19 has catalyzed change – not least in ESG and digital solutions – as the sector is evolves rapidly, adapting in the face of considerable change.

The storm outside may be raging and plenty of asset classes may be in the firing line, but residential is holding up well – not least because, whatever else happens, there will always be a need for housing. Residential real estate won’t escape the effects of covid-19 entirely, but already there are opportunities being identified as we explore in our 2020 PERE Residential report.

PERE fundraising data consistently shows multifamily and residential real estate at, or very near, the top of private investors’ hit list. Our special report uncovers the global market fundamentals underpinning demand.

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