Europe continues to see dramatic growth in residential investments. Over the past three years it has outperformed all traditional sectors with 45% cumulative growth. The multifamily subsector has grown even more sharply, doubling over the past three years, and now makes up around 70% of all residential investment (up from 52% in 2017). Covid has done little to dampen the appetite for multifamily, with its investment volumes bucking the trend in 2020 increasing by 33%, compared with a 17% fall in total CRE investment; overall residential investment increased by 24%. Remarkably, European multifamily investment volumes saw a record Q4 in 2020 with over €18bn funnelled into the sector. This was partly due to a particularly active market in The Netherlands, as many investors brought planned sales forward to avoid a higher transfer tax which was introduced in January 2021. Unsurprisingly, this has had a knock-on effect with correspondingly lower investment volumes at the start of this year; so far in 2021 €28.5bn has been invested in European residential, with €18.7bn specifically into multifamily. We expect investment volumes to be boosted in the second half of the year with several platform deals currently underway. Our current forecasts suggest residential investment will total around €61bn this year.

Residential investment volume in Europe

42012939_MFH assets_v03_01

Source: CBRE Research, 2021

Domestic capital remains active, but cross-border investors are drawn to European residential and multifamily housing as it offers attractive fundamentals for growth. Cross-border residential capital flows have nearly tripled over the past three years, to stand at €34.24bn in 2020, 48% of total investment. We expect this trend to continue; nearly one-third (30%) of respondents to the EMEA 2021 Investors Intention Survey, selected residential as their preferred investment sector. Key target cities included London, Berlin, Munich, and Amsterdam. In 2021 H1 cross border investment totalled €12.5bn, 44% of all European residential investment.

Total cross-border capital flows into European multifamily housing

42012939_MFH assets_v03_02 

Source: CBRE Research, 2021

Total cross-border capital into European Multifamily Housing 2016-2020

42012939_MFH assets_v03_03

Origins of Capital


Around 40% of cross border activity in 2020 originated from other European countries. Still North American investors have increasingly made up a larger share, and in 2020 accounted for 34% of capital inflows, up from 18% in 2017. Around €6bn (18%) of capital originated from the Middle East. So far in 2021 cross border activity has been dominated by European and American investors. Looking on a country by country basis, the U.S. was the top source of cross-border capital for European multifamily housing in 2020 and remains in the top spot so far in 2021. Germany has been the second highest source of capital so far in 2021, having ranked top in 2019. Unusually the second highest source of capital in 2020 was Israel, which hasn’t previously featured in our top 6. This reflected the merger of the German portfolios of the Israel funded Ado with the German funded Adler, and is not a typical cross-border transaction, and Israel comes out of the top 6 in 2021.

Cross-border investments in European multifamily housing by region

42012939_MFH assets_v03_04

Source: CBRE Research, 2021

Top 5 sources of cross-border capital into European multifamily, 2021 H1
42012939_MFH assets_v03_05

Source: CBRE Research, 2021

Investor Type


In 2020, REITs and listed funds deployed most capital into European multifamily housing. This was largely driven by a consolidation trend in the multifamily market which was illustrated by growing M&A activity. Private equity made up an unusually high share of capital at 27%. So far in 2021 investment managers, institutional funds and private equity make up the largest sources of capital.

European cross-border multifamily investments by investor type, 2020 and 2021H1

42012939_MFH assets_v03_06 

Source: CBRE Research, 2021. Notes 2021 HI share in brackets

Top Cities


The cities that have attracted most cross-border capital are Copenhagen, Berlin and London. There are two types of cities in our top ten: cities with rapidly growing multifamily investment markets such as London, Madrid and Dublin; and cities with a longer established history in multifamily investments such as Berlin, Copenhagen and Stockholm. Increasingly the growing markets are taking a larger share of capital, with Helsinki and Vienna entering the top ten, replacing the established German markets of Hamburg and Munich.

Top ten cities in Europe by cross-border multifamily investment volume in the period 2016-2021


42012939_MFH assets_v03_08a 

Source: CBRE Research, 2021

Investor preferences


One of the key characteristics of the European multifamily market in recent years is the large (and growing) share of portfolio and platform sales. This trend is most pronounced for cross-border investors, with only 29% of deals in individual assets. This reflects a strategic demand to quickly establish platforms and deploy capital at scale. For example, Heimstaden have been very active. It was involved in the largest ever Czech Republic residential investment transaction with the purchase of the Residomo residential portfolio for €1.3bn from Round Hill Capital. It also bought the Niam portfolio in Denmark for €1.6bn (£1.4bn) and acquired a portfolio of about 4,000 units in Berlin, worth €830m. So far in 2021 there has been a larger share of single asset transactions, accounting for around half of all cross-border deals. However, this is a timing issue rather than heralding a change in direction and there are a number of large platform and portfolio deals currently in the market.

Proportion of portfolio sales versus single assets in total European multifamily investment volume in 2020
42012939_MFH assets_v03_08

Source: CBRE Research, 2021

European multifamily investment volume in 2020 by size bracket
42012939_MFH assets_v03_09

Source: CBRE Research, 2021