Europe’s capital cities lead the way for their rental market recovery prospects post-pandemic, with its build-to-rent markets ripe for rapid growth and investment, according to the latest research from Cushman & Wakefield.

With the global pandemic temporarily negating the traditional advantages of global urban centres, Cushman & Wakefield examined 27 ‘global gateway’ markets against a number of market performance drivers, revealing which exhibit the most favourable conditions for a rebound in rental market fundamentals and investment. These combine to create Cushman & Wakefield’s ‘Multifamily market rebound ranking’, with half of the top 10 spots occupied by European cities.

David Hutchings, head of EMEA investment strategy at Cushman & Wakefield, said: “With major cities across Europe experiencing an undersupply of high-quality and affordable private rented homes, build-to-rent will continue to be an attractive and rapidly growing asset class, despite the challenges of the pandemic. Our analysis shows that several key cities in the region, including Amsterdam, London, Stockholm, Paris and Dublin, are set to see a robust build-to-rent rebound, due to a range of factors including favourable population demographics, trends toward renting over home ownership and a strengthening pipeline of purpose-built rental units.”

Market performance drivers identified in the report, include:
 
1) The pandemic’s impact on overall residential market performance
Of the 27 global gateway markets, rents fell in all but nine markets in 2020. Home prices, however, rose in all but five markets, suggesting residents in effect ‘doubled-down’ on global urban markets, with a greater commitment to purchasing, indicating confidence in these markets overall. Rents fell in general because the advantages of urban living were negated during the pandemic. Across Europe, some of the largest falls in rents were in London, a higher priced market where one-bedroom rents average 46% of the median gross income.