Global private markets firm Partners Group and real estate investment manager Empira Group have launched the Empira Pan-European Living Strategy, targeting €1 billion in equity commitments for investment across major European cities.
The strategy will invest exclusively in residential and “living” assets, with Germany, the UK, France, Italy and Spain identified as its core markets.
According to Empira Group, the portfolio is expected to comprise about 20 to 30 investments spanning multifamily rental housing, purpose-built student accommodation (PBSA), senior living and single-family housing.
The investment thesis centres on a familiar problem for Australian real estate professionals: housing supply failing to keep pace with demand while affordability pressures push more households towards renting.
The European Commission estimates the EU needs more than two million additional homes each year to meet current demand, while housing affordability has become an increasingly prominent policy issue across the bloc.
Partners Group and Empira said the new strategy was designed to capitalise on structural housing shortages, increasing demand for professionally managed rental accommodation and the relatively low level of institutional ownership within European residential property.
Asset Physics reported the fund will favour existing income-producing assets but will also be able to pursue developments, refurbishments, repositioning and energy-efficiency upgrades where opportunities arise.
Around half of the indicative portfolio is expected to be multifamily housing, with the balance spread across other living sectors including student accommodation, senior living and single-family homes.
The strategy is targeting a net internal rate of return of more than 12 per cent and maximum portfolio leverage of 60 per cent loan-to-cost during the investment period, according to the announcement.
It is also entering the market with considerable scale behind it. Partners Group and Empira said they have already jointly acquired more than 37,000 residential units across more than 135 transactions.
Their broader European living platform currently comprises more than 14,500 residential units across more than 630 assets and projects, with approximately €6.9 billion in gross asset value (AUD).
Empira Group founder and chairman Lahcen Knapp said combining the two businesses would give the strategy both global investment capability and local expertise.
“Living is fundamentally a local and operationally intensive asset class. Successful investing requires not only the identification of attractive markets and assets, but also the people and skills on the ground to implement the business plan,” Mr Knapp said.
“Our joint platform offers us exactly this depth in the areas of sourcing, financing, project development, construction and asset management.”
Partners Group Managing Director and Global Co-Head Real Estate Henrik Orrbeck said housing supply and affordability were central to the investment case.
“European Living represents one of the most attractive structural opportunities in the real estate sector today. In many major European cities, housing supply has not been able to keep pace with demand,” Mr Orrbeck said.
“At the same time, demographic changes, declining affordability of residential property and changing consumer preferences are leading to a further increase in demand for high-quality rental housing.”
Energy efficiency will form another part of the strategy, particularly when existing housing can be upgraded or repositioned.
The European Commission says about 75 per cent of the EU’s building stock has poor energy performance, while the annual renovation rate remains at about 1 per cent.
For Australian agents and property professionals, the strategy provides another example of the scale of institutional capital targeting housing as affordability and supply constraints reshape residential markets internationally.
Fundraising is expected to begin following the strategy’s launch, with its first closing scheduled for the third quarter of 2027.
Source: Empira Group/Asset Physics, European Commission.