European investors are shifting capital from traditional commercial real estate to operational sectors, with purpose-built student accommodation (PBSA) emerging as the most sought-after segment for the first time, according to Savills' investor sentiment survey.
The operational real estate (OpRE) sectors, including rental housing, student accommodation, senior living, hotels and self storage, captured 37% of total European property investment in 2024, rising to 38% in Q1 2025, up from 25% in 2014. PBSA has overtaken rental housing as investors' preferred sector, with 62% planning investments over the next three years compared to 57% for multifamily housing.
The 61 survey respondents, managing nearly €720 billion in assets, plan to deploy approximately €50 billion in OpRE sectors over three years. Living sectors will receive 73% of this capital, with €8.1 billion allocated to multifamily and €7.4 billion to PBSA. Core-Plus strategies have gained popularity, rising to 41% from 18% previously, while opportunistic strategies dropped to 11% from 25% in 2024.
Nearly 90% of investors expect increased demand for ESG-compliant assets over five years, though high construction costs using sustainable materials and unclear European ESG regulations remain barriers. "Poland is becoming increasingly attractive for institutional investors due to growing numbers of international students and a deficit of modern accommodation," said Jacek Kałużny, Director, Head of Operational Capital Markets at Savills Polska.
Poland's developing market status, relatively low rental regulations and growth potential position it to benefit from pan-European trends. The country's rising demand for rental housing, student accommodation and senior services places it higher on institutional investors' priority lists.
