Dutch investment manager Bouwfonds REIM is expanded activities in the student housing market with the launch of a new European fund focused on student residences.
Dutch investment manager Bouwfonds REIM is expanded activities in the student housing market with the launch of a new European fund focused on student residences.
Bouwfonds, part of the Dutch Rabo Real Estate Group, said the Bouwfonds European Student Housing Fund will be structured as a German ‘Spezialfonds’ and will be placed with German institutional investors.
The fund, with a core risk profile, focuses on major European university towns and cities in Germany and France, followed by the UK, the Netherlands and Scandinavia.
The targeted fund volume is between €200 mln and €300 mln. The expected annual yield for investors is around 4% (IRR of 5.5-6.5%) and the maximum leverage 40%.
Investment manager Bouwfonds REIM has already invested and managed student housing on behalf of its European Residential Fund, created in 2007. The vehicle now comprises six student housing complexes, located in Germany and France.
'If we compare the direct yields with those of more conventional residential real estate in our portfolio, these student residences are outperformers, despite their need for more intensive management,' said fund manager Xavier Jongen.
Bouwfonds believes the sector will continue to benefit from stable demand driven in particular by growing numbers of foreign students from outside Europe. 'Another plus point is the anti-cyclical nature of the student housing market: in times of economic weakness and poor job prospects, more people opt for higher education and tend to study longer,' the company said.
Bouwfonds REIM has €5.5 bn assets under management.
