Capital Bay snatches top team to launch new micro-living resi platform
Fast-growing Berlin-based investment and asset manager Capital Bay is setting up its own platform to move into the micro-living segment of the residential property market. The new company, called CB Micro Living GmbH, will kick off in September, and plans to buy or develop at least 10,000 apartments over the next three years, and integrated into the company’s own asset, property and facility management divisions.
To run the business, Capital Bay has hired away the entire top management team (a total of 15 staff) of UPARTMENTS Real Estate GmbH, previously known as YOUNIQ Service GmbH, part of Corestate Capital and an early innovator in the student housing market in Germany.
The team is already looking at a Berlin development with 200 apartments, a Germany-wide portfolio of 5,000 units and a management contract for 2,000 apartments.
According to Capital Bay’s CEO George Salden, “With this entry into the micro-living segment, we are actively expanding our existing platforms for residential, nursing, office and retail property. With the experience and expertise of the new team, we’ll be able to offer our investment partners attractive investment opportunities in the new micro-living segment, right from the start.”
On the new management team to lead the platform, Salden said, “We’re very excited to have such an experienced team on board from the very beginning, as this will allow us to dive into the micro-living segment, and quickly grow. There’s enormously high demand for this product. Investments in micro living are increasingly becoming an integral part of the overall asset allocation for institutional investors. We have to be prepared for this as a cross-usage type investment manager.”
According to a 2017 study by research group Bulwien Gesa, the transaction volume in the micro-living segment has seen continuous growth since 2008. That year saw transactions valued at around €100 million; by 2013 that volume had grown to €500 million and in 2016, apartments valued at more than €1.2bn changed hands.
A key driver of growth in the sector has been the significant increase in the number of single-person households in Germany. In 1980, they accounted for 30%, while by 1990, that figure was around 35% and in 2000, around 36%. But by 2017, single-person households had reached 41.5%, and the trend looks set to continue .
The growing demand for smaller homes is due to, among other reason, rising rents for apartments in large cities, an increase in autonomous lifestyles, the bridging phase from young professionals embarking on their careers to the point of starting a family, an increase of jobs that require people to commute due to the spatial separation of work and family life, and the death of a spouse, as per the population pyramid.
Added to this is the fact that students make up one demand group for micro apartments. The absolute number of students both from Germany and abroad has gone up, as has the demand for temporary, furnished apartments due to shorter study periods, university transfers and semesters spent studying abroad.