Student housing deals to hit €1.5bn this year

Student housing transactions are on track to hit €1.5b in Germany this year, up from just €250m five years ago, Dr. Thomas Beyerle, head of group research at Catella, told REFIRE this month.

‘Student housing has become a luxury segment,’ he said. ‘It’s very fragmented; each operator defines their own market. However, it’s the most transparent market in terms of being able to count the rooms, so investor demand is there.’

It might be easy to keep track of the number of beds but keeping track of the operators is a far trickier business. For example, Hamburg-based international asset and investment manager MPC Capital markets their six properties in Germany under the brand name Staytoo, while the brand Youniq is a creation of serviced living provider Upartments Real Estate with 16 properties in Germany and Spain, according to Catella. On a European level, global student housing provider GSA Group owns three brands - Uninest, The Student Housing Company and Nexo Residencias - in four countries with over 10,000 beds in 32 properties.

Catella has also tapped into investor demand for student housing: it launched its second European Student Housing Fund this year, which it hopes to grow to a €500m vehicle. Its predecessor fund currently has €450m of AUM, with a target size of around €750m, Beyerle said.

According to Catella’s Student Housing in Europe Market Tracker, published this month, there are enormous differences in the student housing offerings across Germany. For example, some operators offer one or two-room apartments and flat sharing in two to three-room apartments, whereas other operators only offer single apartments.

And it is clear that the lack of affordable housing for many students is becoming a major concern. A recent reportage by Germany’s Heute Journal revealed that in some university cities, first year students were being forced to sleep many to a room in sleeping bags because they had not managed to find an affordable alternative. (ssk)