Investors should note that the Living sector has historically produced high risk-adjusted returns over the long term. This outperformance has been lowly correlated with commercial real estate, and therefore provides attractive diversification benefits. Across the Living segments, performance has been driven by considerable and persistent demand-supply imbalances that have supported rental and capital value growth.
Furthermore, European housing stock is outdated, and does not meet modern energy regulations. Shifting demographics is creating significant demand for smaller housing units. Housing remains an essential need; it is not as susceptible to disruption from technology and consumer trends as other investment sectors. Overall, in our view, the structural fundamentals for the Living sector remain intact.
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