Market Radar Europe: Capital into living sector & PropTech sentiment stabilises

The latest developments in the European real estate market this week

November 7, 2025Real Estate

Key Takeaways

Institutional capital is strongly focused on the European living sector, driven by favourable demographics and supply shortages, making residential assets highly defensible and income-stable.
Investment within the living sector is increasingly targeting operational and alternative segments, such as Purpose-Built Student Accommodation (PBSA), senior, and flex-living, due to their potential for higher operating yields.
PropTech investment is stabilising and becoming highly selective, favouring AI-powered solutions that demonstrably drive efficiency and leading to an anticipated acceleration of market M&A activity.

Institutional capital pours into the European living sector

The European living sector continues to dominate institutional activity this week, with a number of large-scale platform launches and significant portfolio acquisitions. This capital deployment reflects the conviction among investors that demographic trends and supply shortages in Europe make residential assets highly defensible and income-stable.

Spanish firm Acciona have sold a portfolio of over 1,000 homes to Argis for EUR 324 million, while EDF and Savills Investment Management are launching a EUR 600 million joint venture specifically targeting pan-European living properties.

Investment is increasingly concentrated in operational and alternative residential segments, namely student, senior, and flex-living, which offer higher operating yields. In the Purpose-Built Student Accommodation (PBSA) space, Amro Partners and Aviva Investors have formed a new joint platform to develop student housing across Germany, capitalising on strong demand in key university cities.

Similarly, the senior living sector is seeing activity with Azora expanding into France through the acquisition of a portfolio of senior independent living facilities from the Emeis Group.

Even the burgeoning flex-living category is growing its footprint, as demonstrated by the operator Bob W opening its first serviced apartment building in Porto, Portugal, aligning with market forecasts that predict the Spanish flex-living sector alone will double its bed count to surpass 38,000 by 2028, according to JLL.

Investors target AI PropTech for efficiency

The European PropTech market is entering a phase of stabilising sentiment, marked by a cautious but deliberate return of investment capital. After a period of cooling funding, investor confidence is rising, with a majority of industry professionals planning to increase their investment pace over the next year, according to the mid-year 2025 Global PropTech Confidence Index from MetaProp.

However, this capital is highly selective, favouring solutions that can prove real economic value through efficiency gains. This trend is demonstrated by German firm Arbio who recently secured a notable USD 36 million Series A round to expand its operations in the European rental market.

Similarly, Germany's Buena recently raised EUR 49 million to scale its own AI-powered property management platform, reinforcing the market's clear focus on technologies that directly translate into stronger asset performance and rental yields.

Analysts anticipate a record acceleration of M&A activity in the coming quarters, signalling a shift toward market consolidation as larger platforms acquire strategic technology to build scale.

Look out for a new edition of the GRI Institute's Market Radar Europe next week!