Over 500 companies are now involved in the rapidly growing student housing sector in Europe, according to a new study by research specialist StudentMarketing.
Student housing has recently emerged as the number one asset out of the alternative investment asset classes, with 53% of investors currently targeting the sector.
'We have now succeeded in documenting over 500 investors, developers, operators and their portfolios, 20 EU markets, 60 cities, 5,000 student housing buildings,' commented StudentMarketing CEO Samuel Vetrak. 'This makes the asset class a convenient environment for investment decisions, entry or expansion strategies, due diligence or pricing models.'
Over the past 10 years, the student housing sector has evolved into a high liquidity asset class, reporting a 10-fold increase in investment from €720 mln in 2007 from €6.9 bn last year, research shows. Even so, yield rates continue to over-perform mainstream asset classes by a great margin.
Unmet demand for purpose-building student accommodation
As such, private equity firms have been piling into the sector at a time of historically low returns. Earlier this month, US asset management group Brookfield emerged as the new owner of European student housing specialist International Campus (IC).
IC, with a portfolio of 11,800 apartments across four countries, is seeking to expand its portfolio to 20,000 units in the medium term. 'We will use the fresh capital to expand and scale our business model in Western and Central Europe, with an emphasis on Germany,' commented CEO and company founder Horst Lieder.
Commenting on the deal, Zach Vaughan, managing partner and European real estate head at Brookfield, said there was 'unmet' demand for purpose-built student and young professional accommodation in Germany and continental Europe.
Brookfield's acquisition in Europe follows the company's expansion in the UK where it currently operates through its Student Roost platform. In early 2018, the unit bought the Enigma portfolio of 5,400 beds in 12 UK university towns and cities from CBRE GI and Curlew Student Trust for €586 mln.