Residential property and new forms of living will account for a significant proportion of institutional investment over the next five years, a period during which 77% of investors expect to increase their exposure to these segments, according to the sixth annual global survey conducted by Patrizia between May and June 2026.
The study, based on responses from institutions collectively managing nearly €1 trillion, ranks conventional housing as the most attractive type of housing, chosen by 40% of participants, followed by affordable housing, which accounts for 34% of preferences.
The structural shortage of supply, demographic changes and the need to expand the modern housing stock are fuelling interest in a sector that offers stable demand and cash flows that are more resilient to economic volatility. Although investors are beginning to show a greater willingness to carry out transactions, the deployment of capital remains constrained by risk and is directed primarily towards assets and markets with solid fundamentals.
This quest for stability is also reflected in the strategies chosen, as nearly two-thirds of respondents plan to increase their exposure to Core and Core+ investments, which focus on high-quality properties, predictable income and a low or moderate risk profile, although the latter also offer scope for improving asset management and returns.
This approach is complemented by a growing interest in refurbishment and ‘brown-to-green’ strategies, whereby older or inefficient buildings are transformed to reduce their energy consumption, bring them into line with regulations and increase their value. Active management, sector specialisation and knowledge of individual markets are thus gaining ground over generalist investments.
The cost of debt, however, will continue to influence decisions. Seven out of ten investors expect financing to become more expensive over the next two years, although 63% are confident that property rental yields will continue to rise over the same period.
Mahdi Mokrane, Head of Property Fund Management at Patrizia, believes there is a clear desire to move from strategy to execution, although capital continues to be deployed selectively and in a risk-adjusted manner. In his view, the residential and living sectors are benefiting from strong structural demand, insufficient supply and housing needs that are creating opportunities for long-term investment.
Infrastructure attracts more capital
Institutional appetite is extending to infrastructure, where 45% of respondents expect to increase their allocation over the next five years, up on the figure recorded in the previous edition of the survey.
The energy transition remains the most attractive sector, with 41% expecting to increase their exposure, while digital infrastructure continues to attract significant interest and social infrastructure has seen one of the biggest increases, rising from 2% of responses in 2025 to 17% in 2026.
The outlook for investment activity is also positive: 73% anticipate an increase in the volume of transactions over the next two years, driven by demand for assets linked to digitalisation, decarbonisation and the modernisation of essential services.
Although tighter financial conditions have tempered return expectations, infrastructure continues to be seen as one of the leading long-term investment alternatives within real assets, particularly due to the duration of its income and its exposure to structural trends.
Phoebe Smith, Head of Infrastructure Fund Management for Europe at Patrizia, noted that interest in the energy transition is no longer limited to generation, but is also turning towards the networks and assets needed to improve security of supply and support more decentralised systems. A similar dynamic can be observed in digital infrastructure, where growing demand for distributed networks is placing greater emphasis on local-scale projects.
Europe gains traction amid geopolitical uncertainty
Global volatility is having a moderate or significant impact on the real asset portfolios of 85% of respondents, which has led to greater selectivity across sectors, geographies and investment partners.
Against this backdrop, Europe remains attractive to institutional investors: 24% plan to increase their exposure to the region over the next three years, compared with 4% who expect to reduce it. Institutional stability, urbanisation and opportunities linked to long-term trends underpin this preference.
Uncertainty has also heightened the importance of having specialised teams and on-the-ground execution capabilities. More than 80% of investors consider in-depth knowledge of the European market and a local presence to be key criteria when selecting a manager, at a time when capital allocation is focused on specific opportunities rather than maintaining a broad-based exposure.
Despite the macroeconomic and geopolitical context, digitalisation, the energy transition and the ‘living’ sector remain the main structural drivers of investment, with an institutional strategy increasingly geared towards resilient assets, stable income and markets where value can be created through specialised management.
