In today’s evolving real estate market, investors across Europe are increasingly shifting their focus from traditional commercial real estate to operational real estate (OpRE) — a trend accelerated by post-pandemic dynamics, higher interest rates, and changing consumer preferences. Among the many promising segments is self storage, which offers relatively stable, inflation-linked returns and flexible income models.
In this blog, we outline:
• What defines OpRE vs traditional real estate
• Why OpRE is gaining investor momentum
• Whether OpRe could be right for your portfolio
1. What Is the Difference between Traditional and Operational Real Estate?
Operational real estate (OpRE) refers to property assets whose value is intrinsically tied to the business operating within them. Unlike traditional real estate, where income is generated primarily through long leases, OpRE derives revenue from both space and services, often requiring active management.
Traditional Commercial Real Estate (TCRE)
Definition:
Assets such as office buildings, retail centres, core residential and industrial units, leased on long-term contracts.
Typical Revenue Model:
• Fixed rental income via 5–15 year leases
• Minimal landlord involvement
Risk/Return Profile:
• Lower yield, lower volatility
• Limited inflation protection
• Vulnerable to market shifts (e.g., hybrid working)
Operational Real Estate (OpRE)
Definition: Income-producing property where the operator directly engages with customers and services are integral to returns.
Examples:
• Self storage
• Student housing (PBSA)
• Healthcare and senior living
• Hotels and co-living
• Data centres
• Build-to-rent residential
Typical Revenue Model:
• Short-term leases
• Dynamic pricing models
• Service and experience-based income
Risk/Return Profile:
• Higher yields, more active management
• Greater pricing flexibility
• Relative resilience in inflationary periods
2. The Shift Towards Operational Real Estate
In light of rising operating costs and changing consumer behaviours, investor appetite for OpRE has surged across Europe over the past five years. According to Savills’ European Operational Real Estate Investor Sentiment Survey published June 2025:
• OpRE accounted for 37% of all real estate investment in Europe in 2024, up from 25% in 2014.
• 52% of investors now plan to enter OpRE via direct private investment — up from 42% just a year earlier.
• Key sectors drawing capital include:
o Multifamily (51%)
o Student accommodation (PBSA) (51%)
o Care homes (36%)
o Lifestyle hotels (25%)
o Self storage (18%)
3. Is Operational Real Estate such as Self Storage Right for Your Portfolio?
According to the FEDESSA European Industry Report published in Q4 2024, year-to-date transaction volumes were €875M, 3x higher than YTD numbers from the 2023 FEDESSA Survey. Europe’s self storage market currently spans 16.5 million sq m in gross area, a 67% increase since 2019.
A recent article in the Property Chronicle outlined that OpRe assets such as self storage present strong strategic advantages.
• Inflation Resilience
Unlike fixed long-term leases, OpRE allows pricing agility — weekly or monthly rate adjustments enable owners to respond to cost changes swiftly.
• Diversified Income Streams
OpRE generates revenue from multiple channels: space rental, add-on services, and dynamic pricing. This lowers tenant concentration risk and boosts income stability.
• Higher Yield Potential
Managed OpRE assets can offer superior yields due to service income and high occupancy flexibility. Operators can enhance returns through customer experience, branding, and pricing strategies.
• Active Control
Operational assets offer more control over returns. You can increase NOI (net operating income) through service innovation, cost optimisation, and targeted marketing.
• Customer Focus
Today’s customers demand convenience and flexibility. OpRE enables tailored offerings (e.g., flexible storage) and smart technology integration.
Whether you’re a property investor looking for diversification or an entrepreneur seeking a new high-demand niche, self storage can present a compelling opportunity.
Ready to take the next step?
✅ Download our free Self Storage Startup Guide
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