Now is the time to invest in the rented residential sector, proclaims research firm Bonard which has undertaken a survey of seven experts in the field to investigate the factors behind the sector’s success.
Among the conclusions Bonard states that the sector is poised to remain a more lucrative investment opportunity than asset classes such as office or retail and that it is producing higher prime yields than other traditional real estate asset classes.
Bonard also cites healthy demand, resilience against the economic crisis, rising rents and high occupancy as further reasons to invest. The firm points to rent rises of 3–7% in Western Europe and up to 10–15% in Eastern European countries, but without adverse affects on the level of demand because of the shortage of alternatives – it also points to the rise in interest rates which make mortgages more expensive and property harder to afford.
Furthermore, the firm points out that currently 30% of Europeans rent their housing and this proportion is expected to grow owing to increased urbanisation, higher mobility, later marriage and the increased level of single-person households.
“We see big opportunities in this sector, and it is worthwhile investing even in such turbulent times,” said Julia Momotiuk, rented residential director at Bonard.
“It is fair to conclude that the sensitivity of demand of rented residential to growing rents is much weaker than in traditional sectors such as hotels, retail or logistics. “This means that, despite growing costs and compressing yields, investments in rented residential are still very attractive.”
