Allianz Real Estate, International Campus and an unnamed investor represented by CBRE Global Investment Partners plan to fully invest their freshly launched €1 bn Fizz Student Housing Fund ‘within the next three-to-four years', Allianz’s CIO Olivier Téran has told PropertyEU.
'Allianz has invested €175 mln in the fund,' Téran said. 'We want to build some scale, so our plan is to grow it to €600 mln of equity which, with gearing, will give us €1 bn. We can extend the fund to additional investors as it grows.' The unnamed investor, believed to be a Dutch insurer, has also invested €175 mln in the fund. In addition, International Campus holds a 1% stake.
'Our new – second - Fizz fund will invest primarily in Germany because it's the most important market but it could also invest in the Netherlands and Austria, particularly in Vienna,' said Horst Lieder, CEO of International Campus.
International Campus is a Munich-based student housing developer and investor operates around 7,200 student housing apartments in Germany and the Netherlands. The firm said in a statement on 21 December that the initial portfolio for the new Fizz fund comprised four fully rented buildings with more than 1,200 apartments in cities such as Berlin, Frankfurt (pictured) and Hanover for an undisclosed sum. The Luxemburg-registered fund has a 70% equity ratio and will run for an initial duration of 10 years, although it can be extended.
Allianz is mulling a broad range of options to grow the Fizz portfolio, Téran said. 'One way would be to repurpose existing buildings,' he said. 'This could include converting existing residential buildings into student housing. We would also look at repurposing offices.'
It is not Alllianz's first foray into student housing. It has been active in the UK student housing sector since 2015 via its partnership with local student housing provider Unite Students. (The investment volume has not been disclosed.) It also has a presence in the US student housing market.
International Campus is aiming to grow its own student housing portfolio to more than €1 bn by 2021, up from €600 mln today, according to Lieder. 'Our goal by 2020/2021 is to hold around 8,500 student housing units in Germany, 5,000 in the Netherlands and 3,500 in Vienna. We are currently working on three acquisitions in Berlin, Cologne and Frankfurt.'
Fizz’s predecessor fund was launched in 2013 and raised €100 mln from Middle Eastern and European investors and is now fully invested.
'When our latest Fizz fund is fully-invested, we could launch a follow-up fund with our existing partners and perhaps even some new ones,' Lieder said.
Allianz, for its part, is keen to tap into the German student housing market due to the ever-increasing number of students, Téran said. 'The population may be shrinking but student numbers are growing. There were 2.7 million students for the academic year 2014-2015 in Germany. We want to create a product for millennials that reflects their lifestyle, so that they can live under one roof but cook together or organize events together. We also have staff on site, so we are creating a safe environment, which also appeals to parents.'
Over the past year, a growing number of global investors have tapped into Germany's student housing market, seduced by yields that are hard to find elsewhere, as well as a lack of modern student housing in many university cities.
