Investor appetite for Europe’s living sectors is continuing to grow, with formats such as co-living, single-family housing (SFH) and senior living attracting increasing attention from institutional capital.

According to Savills’ latest European Investor Survey, conducted alongside Savills Investment Management, investors representing €540bn of real estate assets under management are increasingly allocating capital towards operational real estate (OpRE) — sectors where performance is driven by active management and strong resident experience.

The survey highlights a clear trend: since 2022, investment into operational real estate has risen from 30% to 38% of total real estate investment, reflecting a growing shift away from traditional passive property models and towards operationally driven living assets.

Nearly two-fifths of investors expect to increase their allocations to these sectors over the next three years, reinforcing the long-term confidence in Europe’s living markets.

Co-living and flexible living models gain traction

Among operational real estate sectors, investors identified several living formats as key priorities:

• Purpose-built student accommodation (PBSA) – 58%
• Multifamily housing – 52%
• Single-family housing (SFH) – 52%
• Co-living – 50%
• Senior living – 42%
• Care homes – 42%

The continued rise in investor interest in co-living reflects the increasing demand for flexible, community-led living environments, particularly in major European cities where affordability, mobility and lifestyle preferences are reshaping how people choose to live.

As urban populations grow and housing supply remains constrained in many markets, professionally managed living models are becoming an increasingly important part of the housing ecosystem.

At the same time, interest is expanding across adjacent sectors that blend residential and hospitality elements. Serviced apartments and aparthotels, for example, saw investor appetite rise from 27% to 33% year-on-year, highlighting the growing convergence between living, hospitality and lifestyle-driven real estate.

UK and Europe remain key investment markets

Geographically, investors continue to prioritise the UK and Ireland, followed by the DACH region (Germany, Austria and Switzerland) and Southern Europe (Italy, Spain and Portugal).

Meanwhile, 16% of investors are adopting pan-European strategies, reflecting the increasing scale and institutionalisation of the living sector across the continent.

Across operational real estate sectors, investors surveyed expect to allocate around €45bn over the next three years, with 2027 forecast to be the most active year for investment activity.

A more operational, income-driven real estate cycle

Following a challenging fundraising environment in recent years, investor sentiment is beginning to improve. Many respondents anticipate better market conditions over the next 12 months, with value-add and core-plus strategies seen as the most accessible for raising capital.

Direct investment and joint ventures remain the preferred approach for 58% of investors, although interest in fund structures is growing, with 23% of respondents now favouring this route compared with just 8% in 2025.

This shift is expected to support fundraising and allow investors to gain exposure to operational sectors without building in-house operating platforms.

The growing role of professionally managed living

Overall, the findings point to a gradual return of capital to European real estate, with professionally managed living sectors playing an increasingly central role in the market.

As housing demand evolves and urban lifestyles continue to change, operationally driven models such as co-living, build-to-rent and other flexible living formats are expected to remain key areas of focus for investors across Europe.