US, UK and European student housing investors are now looking at mainland Europe where, Philip Hillman, Chairman of the JLL UK Alternatives team said at PropertyEU's latest Student Housing Investment Briefing.
US, UK and European student housing investors are now looking at mainland Europe where, Philip Hillman, Chairman of the JLL UK Alternatives team said at PropertyEU's latest Student Housing Investment Briefing.
'They can see the large student numbers, the positive demographics, the largely obsolete supply, and they can spot great opportunities. There is a huge potential, as in Europe we are barely skimming the surface,' he commented at the briefing which was held in March at MIPIM in Cannes.
There are challenges as well. It is difficult, if not impossible, to have a Pan-European strategy in the sector, as each country has different needs and different regulations, the panelists pointed out. In Spain, for example, there is a legal requirement to provide meals for students as well as accommodation, while France imposes a cap on student rents at a national level but building laws are local and can vary substantially from place to place.
As for Germany, by far the largest and most developed European market after the UK, the federal system means that every state has its own regulations and some, for example, insist on the provision of a car parking space for every bed despite the fact that very few students own a car. 'The same metrics will not work in all locations and that is a challenge,' said Hillman.
'It is a fact that lack of supply is the only thing that all countries have in common,' said Thomas Landschreiber, chief operating officer at Corestate Capital Group.
The other common traits are students' preferences: according to surveys they all want to live either close to the University or in a trendy location with good transport links, and they prefer to have their own bedroom, bathroom and kitchen but like having communal areas for entertainment and relaxation and preferably a gym. Broadband internet is a must.
Exporting the US model
US specialist Greystar is bringing American-style student accommodation to Europe, said Steven Zeeman, managing director at Greystar Continental Europe: 'The US model is all about high level amenities, creating a community to deliver a better student experience. We have 20,000 beds in the UK and last year made our first investment in Amsterdam. Now we are developing across the Netherlands, building our own operational platform and planning to expand into other European countries.'
The Dutch market is uniquely interesting because of the huge concentration of students in the metropolitan area of the 4 big cities, there are one-year campus contracts and the point system of rent is 'very transparent and very easy to understand,' said Zeeman. 'It is a much smaller market than the German one, but it has higher yields and it is easy to operate in.'
