Ireland, Italy, Portugal and Spain: Europe’s new residential hotspots

Ireland, Italy, Portugal and Spain are emerging as potential hotspots for investors in the residential sector.

The prediction comes from Paul Bashir, COO at Round Hill Capital in London, who says the real estate private equity firm is attracted by the macro thesis within the four countries from both a residential and student accommodation investment perspective.

“We tend to look at markets where there is a strong macro, coupled with a real estate opportunity,” says Bashir, explaining that countries such as Ireland are lacking the necessary infrastructure to match their rate of economic development. Ireland, in particular, has continued to post very positive GDP growth, underpinned in part by industries such as IT that have good long-term prospects. As well as Dublin, he says Cork in southern Ireland is also a location for investors to watch.

In Portugal, the main cities of Lisbon and Porto have seen a boom in their young populations wanting to live and work there, while Italy is also going through a similar experience.

“It has a very strong macro at the moment,” says Bashir. “It’s strange, because Italy is going through so much turmoil from a political standpoint, and economically it’s still not proven, but it is probably where Spain was four or five years ago. The investment fundamentals appear strong.”

In addition to emerging markets in the residential sector, Round Hill also is keeping a close eye on core areas such as Amsterdam, Barcelona, Madrid, as well as a number of German cities, where growth is still possible in part owing to old stock that is not fit for purpose coupled with continuing strong demand fundamentals.

Bashir adds European residential is continuing to attract both seasoned and new investors into real estate, with pension funds from Europe, North America and South Korea, as well as sovereign wealth funds from Singapore, having interest in the sector.