DREF acquires €85 mln of student digs as part of growth strategy

Investment consultant Engel & Völkers Investment Consulting (EVIC) has acquired student residences in Germany with a market value of €85 mln on behalf of Luxembourg-based student housing investment manager Deutsche Real Estate Funds (DREF).

DREF is a private provider, owner and operator of student living space in Germany, which manages a portfolio of more than 3,500 residential units.

'We created a large portfolio of student residential units last year and in the process established an excellent working relationship with Engel & Völkers Investment Consulting,' commented Felix Bauer, CEO and CSO of Deutsche Real Estate Funds Advisor. 'By the end of 2016, we plan to have at least doubled the size of our portfolio and are already working on a substantial pipeline of projects.'

DREF recently appointed EVIC with a mandate to select, prepare and purchase properties with a value of up to €200 mln. EVIC has access to the nationwide network of the Engel & Völkers Group, which comprises more than 40 commercial offices and 300 locations in Germany.

DREF builds, acquires, refurbishes and manages student residences let to students under the Twenty First brand. The residential properties acquired so far are located in cities including Berlin, Bremen, Kiel, Stuttgart, Bochum and Essen.

'The market for student housing really took off in 2015, in part because of DREF’s activities. It is gradually becoming increasingly difficult to acquire good quality buildings in central locations at reasonable prices,' noted Kai Wolfram, managing shareholder at EVIC.

The Bauer Group is DREF's majority shareholder. Internos Global Investors and the Somerston family office Group have holdings totaling 27.5%.

Germany’s student housing market is heating up with a number of portfolios coming on to the market in the first weeks of 2016, Bauer recently told PropertyEU.

‘Finally we are seeing some movement and trading in Germany,’ he said. ‘There’s a number of portfolios above €100 mln and five or six buildings. There's movement now in the German market with insurance, pension funds, institutional money moving in.

‘Our bond was the first institutional bond in that sector and we are looking forward to an exciting 2016 in German student housing which we think is one of the least volatile asset classes at the moment.’

DREF recently secured around €150 mln to invest in student residences through a revolving credit facility with Chenavari Investment Managers, raising its total amount of available capital for 2016 to €150 mln.

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Investment Briefings

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The growth in the student accommodation sector will be discussed at two upcoming PropertyEU investment briefings

London, 17 February
European Residential & Student Housing


MIPIM, Cannes 16 March
Student Housing Investment Briefing - MIPIM