Institutional capital must play a central role in meeting Europe’s housing, demographic and sustainability challenges, real estate leaders agreed at a panel organised by the Holland Metropole alliance, UKCAP and others at EXPO REAL 2025 in Munich.

Regulatory consistency is key to boosting investment, the panel said. Photo: UKCAP

During the session, titled Global Capital, Local Impact, speakers from Europe and North America discussed how to unlock institutional investment in a rapidly changing real estate landscape.

Despite ongoing geopolitical and economic uncertainty, long-term investors remain committed to European markets, they said, provided regulation and policy frameworks are stable and transparent.

Maturing investment destination

Iryna Pylypchuk, director of research and market intelligence at INREV, said Europe was increasingly viewed as a “stable, maturing investment destination” for US and Asia-Pacific investors seeking diversification and reliable yields. Residential segments – from affordable housing to senior living and logistics – are strong performers that combine resilience with social and environmental impact, she said.

INREV data showed specialist residential funds now make up the largest segment in pan-European indices, reflecting growing recognition that housing offers both social value and institutional-grade returns.

The Netherlands for example, faces one of Europe’s most urgent housing shortages. Rising demand from students, professionals, and seniors is fueling a long-term need for high-quality rental housing, particularly in urban areas. One million new homes and €400 billion in capital will be required to address the issue by 2040, of which €280 billion will need to come from international investors.

Harmonised rules essential

Panellists, including Bouwinvest chief executive Mark Siezen, agreed that predictable, harmonised rules are essential for investors, who cited fragmented regulation and tax complexity as major barriers to cross-border investment. “Stability doesn’t mean inertia,” one speaker said. “It means knowing the rules won’t change mid-game.”

The European residential sector has become a core institutional asset class. But to achieve scale, governments must work with private capital to de-risk projects and speed up approvals. The Netherlands’ €17 billion housing programme – combining public funding with private execution – was cited as a model for others.

Five key levers

The discussion also drew parallels with the United States, where reforms to regulation and tax treatment helped open the housing market to institutional capital. Europe, the panel said, is moving in the same direction as more “institutional-quality” housing products emerge.

Panellists identified five levers to accelerate investment: EU tax harmonisation, targeted financial incentives, scalable public-private frameworks, transparent benchmarking, and planning reform to enable faster regeneration.

Asked what single policy shift would make the biggest difference, the speakers identified three priorities: regulatory consistency, long-term housing strategies backed by funding, and greater alignment across jurisdictions.

Turning intent into action, participants said, will be key to unlocking Europe’s next wave of sustainable real estate growth.

The panel session Global Capital, Local Impact was organised in partnership with Holland Metropole, UKCAP, INREV, ULI Europe and AFIRE. More key takeaways on UKCAP's website.