A record €22.5 billion was invested last year in European forward-funding multifamily deals, according to JLL data. That made up 39% of transaction volumes in the sector, excluding the €31.5 billion invested in two income producing platform deals in Germany and the Nordics. In Germany, just under a quarter of multifamily deals were for project developments last year, a record proportion.

Investors continue to commit capital to building new rental homes, partly due to the nascent nature of the multifamily sector but also by the potential to create scale, offer operational efficiencies as well as fulfill mounting ESG requirements.

But there are headwinds to currently consider, says Gemma Kendall, head of multifamily investment, EMEA Capital Markets at JLL.
“Appetite is clearly there and remains high,” she says. “However, construction costs, which have been rising for some time, remain a factor, as does the increased cost of borrowing given recent central bank rate hikes.”