Corestate renews focus on student and micro-living segment

The Luxemburg-based private equity group Corestate Capital has been refocusing its efforts on revitalising its interests in the student housing market, a segment it first got involved in many years ago with its majority stake in listed YOUNIQ group, a student housing specialist.

Late last year Corestate aborted its planned stock market listing due to "a difficult environment for IPOs in Germany's stock market", at a time of particular market turbulence.

Corestate has just completed its previously announced squeeze-out of the minority shareholders in YOUNIQ, by which the remaining 7.8% of the shares are now fully-owned by the Frankfurt-based subsidiary Corestate BenBidCo. Corestate will then de-list the company and recapitalise YOUNIQ, before buying additional sites for new construction. Corestate CEO Ralph Winter has said in the past that its student housing subsidiary had underperformed in the past due to "management mistakes and lack of capital". The YOUNIQ shares have fallen heavily since their initial flotation in 2006.

YOUNIQ currently owns 2,500 student apartments under management or construction in Germany and Austria. Last year it opened Austria's largest residential complex for students and young professionals (with micro-apartments) in Vienna.

The "Linked Living" building with 600 apartment on 11 floors is part of the Messecarree urban development project, near to Vienna University's Business Department, the Austrian Centre Vienna, the city's Congress Centre and the famous Prater amusement park.

More recently Corestate bought a site in Berlin's Wedding district to develop a high-quality student housing scheme with 160 units over seven floors. The scheme, on the corner of Müllerstrasse and Utrechter Strasse, will include 600 sqm of retail space.

According to Thomas Landschreiber, Corestate's CIO, commented, "This asset class represents an attractive investment opportunity for investors, as the demand for student living space runs independently of economic conditions. Increasing numbers of students generate a vast demand for student living space which cannot be met by public organisations and the residential market alone. This demand in combination with an intelligent usage concept convinces our investors.“