Expanding into The Netherlands

International Campus AG expands into The Netherlands 

Dear readers, 

Now it’s official. The number of new students will remain con-stantly high. The Standing Confe­rence of the Minis­ters of Educa-tion and Cultural Affairs (KMK) has consider­ably raised its forecasts for the number of new students. It now assumes – as have many obser­vers for years – that by 2020 around half a mil-lion young people per year will begin univer­sity. Fortu­na­tely, public student grants (BaföG) will also be raised to contempo-rary levels. 

The percep­tion and accep­tance of the asset class is growing around the world. The inter­na­tional consul­tancy group Savills claimed recently: “Student accom­mo­da­tion became a successful and important asset class during the global finan­cial crisis.” Against the backdrop of ongoing low interest rates, invest­ment alter­na­tives which offer reasonable returns have become more popular than ever with insti­tu­tional inves­tors. 

The last few months have also been exciting for Inter­na­tional Campus. We have streng­thened our team, moved to a new of-fice and ventured into the Dutch market, where there will be a shortage of some 28,000 student apart­ments by 2020. Together with DUWO, the Dutch market leader for student accom­moda-tion, we will see more than 2,200 student apart­ments complet-ed in the next few years as investor and co-developer. In this IC newsletter, we will take a look at current trends and the residen-tial market in Berlin. We will also intro­duce our newly estab-lished corpo­rate consul­tancy firm “Consul­ting Cum Laude”. 

Horst Lieder 

CEO of Inter­na­tional Campus AG 

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Student living: current trends 

Forecasts adjusted 

At the begin­ning of July 2014, the Standing Confe­rence of the Minis-ters of Educa­tion and Cultural Af-fairs (KMK) consider­ably raised its forecast for the number of new students – a well-overdue correc-tion, accor­ding to many obser­vers. The KMK now assumes that some 500,000 young people will begin univer­sity in the next few years. The number of students will even reach more 465,000 in 2025. So far several factors have been un-deresti­mated by officials. For one, the tempo­rary double volume of A‑level students leaving school due to educa­tional reforms will also have an impact in the medi-um term, plus there is also a greater influx from abroad. The number of foreign students at German univer­si­ties, high schools and technical colleges is expected to rise rapidly to 300,000 by 2020. While student fees in the UK, for example, can amount to up to EUR 18,000 per academic year, Ger-many has the advan­tage of having no student fees. 

Trend towards more educa­tion 

In 2012 almost 54 per cent of school leavers had higher educa-tion entrance quali­fi­ca­tions – in 2003 it was only 39 per cent. Dur-ing this period the percen­tage of new students rose from almost 40 to more than 61 per cent. Ac-cording to surveys, 77 per cent of A‑level students plan to go to uni-versity after finis­hing school. Since 2011 the percen­tage of new stu-dents has constantly been above 50 per cent. But while the number of students has increased by 25 per cent in the last 12 years, the number of rooms in residenc-es has hardly grown by more than 4 per cent. 

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Demand exceeds small-scale 

residen­tial cosns­truc­tion 

Whether it is a shared apart­ment, a place in student accom­mo­da­tion or a single apart­ment, small-scale residen­tial accom­mo­da­tion is rare, and demand is subse­quently high. There conti­nues to be an acute shortage of housing in many me-tropo­lises and univer­sity towns. Accor­ding to the recent fifth re-port by Allens­bach Research Insti-tute and Reemtsma Founda­tion entitled “Study condi­tions 2014”, 72 per cent of all new students in Germany experi­enced “diffi­culty” or “great diffi­culty” in finding ap-propriate accom­mo­da­tion. While construc­tion is once again increas-ing in Germany, only very few stu-dents are actually benefiting from this. 

Mounting compe­ti­tion 

As part of the stronger migra­tion to cities and metro­po­litan areas, the rising share of people living alone and incre­asing mobility, mi-cro apart­ments are becoming a hugely sought-after commo­dity. Post-graduates, commuters, sin-gles and students are all looking for the same type of small-scale residen­tial accom­mo­da­tion. Ac-cording to the fifth Allens­bach re-port, appro­priate accom­mo­da­tion is “extre­mely important” to 27 per cent of students. For 30 per cent of all univer­sity students, accom-modation was a factor in deciding where to study. A recent report by the inter­na­tional consul­tancy company Roland Berger confirmed the trend: by 2025 – over the next eleven years – the number of house­holds in Germany will in-crease by around 2 percent. With some 41 million house­holds, this corre­sponds to an increase of more than 800,000 house­holds. This is a clear indica­tion that one- and two-room apart­ments will be parti­cu­larly sought after in Ger-many.

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In focus: Berlin 

Student accom­mo­da­tion 

Market in the capital 

Berlin is very popular among students. A total of 164,728 young people are en-rolled at the city’s four universi-ties, three art schools, seven technical colleges and several dozen private univer­si­ties. Three of the four univer­si­ties are elite univer­si­ties. Around 16 per cent of students are from abroad. Of the students in Berlin who took part in the fifth Allens­bach re-port “Study condi­tions 2014”, 82 per cent experi­enced “diffi-culties” or “great diffi­cul­ties” in finding accom­mo­da­tion. There are a total of 9,411 places in student accom­mo­da­tion, which corre­sponds to an accom­moda-tion ratio of 6 per cent. The res-idential vacancy rate in Berlin stands at just around 2 per cent. Rents have accor­dingly risen: by 36.5 per cent on average from 2008 to 2013. Demand for ac-commo­da­tion in the city centre within the S‑Bahn ring is particu-larly high. Of all Berlin house-holds, 54 per cent are single-person house­holds. 

“The metro­polis is awake­ning“ 

The economic forecasts for Ber-lin are also positive. A recent study by PWC ranks Berlin at number 11 of the world’s 30 most important metro­po­litan areas. More than 200,000 peo-ple work in research, and more than 200,000 work in the arts and creative industry. Growing economic and purcha­sing pow-er, a high quality of life and ex-cellent infra­struc­ture attract around 50,000 people – most of them young – each year. Around 30 million overnight stays by tourists are expected in 2014.

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Three questions for Roman Diehl about Consulting Cum Laude: 

Why did Inter­na­tional Campus estab­lish “Consul­ting Cum Laude” (CCL)? 

Based on its close proxi­mity to the student target group, Inter-national Campus will verti­cally diver­sify its business model with the corpo­rate consul­ting firm “Consul­ting Cum Laude”: from student accom­mo­da­tion to con-sulting and market research. It is becoming incre­asingly evident that students and graduates are a valuable resource for the whole economy, both as cus-tomers and employees. We want to exploit this. 

For whom is this consul­ting platform attrac­tive? 

Consul­ting Cum Laude is not on-ly attrac­tive for the real estate industry. We there­fore offer our services to compa­nies of all sec-tors and sizes that want to make themselves ready for the “battle for talent” and seek direct ac-cess to the 17-to-32-year-old custo­mers of today. 

What is special about CCL and when does it start? 

“Genera­tion Y” thinks diffe­rent-ly than previous genera­tions, which is obvious conside­ring the digita­li­sa­tion of (social) life. We have there­fore opted for an in-novative consul­ting approach: based on an exten­sive knowledge database, experi-enced manage­ment consul­tants work closely with creative stu-dents to develop effec­tive solu-tions, for example in “employer branding”. CCL starts in mid-August. Demand from compa-nies is huge! 

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News 

European mobility programmes to become “Erasmus+” 

The European Union is combin-ing its mobility programmes for students and appren­tices for all 28 member states under one roof and is incre­asing the budget consider­ably. By 2020 the EU expects the exchange pro-gramme to cost EUR 14.8 billion. The programmes Erasmus, Co-menius, Leonardo da Vinci and Jugend in Aktion will become “Erasmus+”. 

Record number of German pupils want to take A‑levels 

Accor­ding to the report “Jugend Leben” by the Univer­sity of Gies-sen, 77 per cent of the 6,000 pu-pils surveyed between the ages of 10 and 18 want to take A‑levels. 

Bachelor insuf­fi­cient 

Accor­ding to the fifth Allens­bach report, 61 per cent of students want to earn a Master’s degree after their Bachelor’s degree. Only 27 per cent say a Bachelor’s degree suffi­ci­ently prepares them for working life. The lim-ited accep­tance of the Bache-lor’s degree and better earnings and career options are the main reasons cited.

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Influx to univer­si­ties remains high 

The number of new students will remain high in the coming years, accor­ding to new estimates by the Standing Confe­rence of the Minis­ters of Educa­tion and Cul-tural Affairs (KMK). By 2019 it is expected that around 500,000 young people will enrol at uni-versity each year. Accor­ding to KMK, the number of new stu-dents in 2013 amounted to around 507,000. 

Bavaria to increase funding for student apart­ments 

Federal State Bavaria plans to increase funding for the con-struc­tion of student residences. In order to create 1,000 new places in student accom­moda-tion, funding has been increased to EUR 27.5 million for 2014 – which corre­sponds to EUR 27,500 per one apart­ment. 

Stable percen­tage of new stu-dents 

Since 2011 the percen­tage of new students in Germany has been constantly above 50 per cent. Expen­diture on educa­tion, research and science now ac-counts for more that EUR 247 billion, or 9.3 per cent, of GDP. 

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Student housing an inter­na­tion-ally important asset class 

In a recent analysis, global real estate service provider Savills concluded that student accom-modation has become a major asset class at an inter­na­tional level. Global invest­ments in-creased from EUR 2.5 billion in 2007 to around EUR 5.3 billion in 2013. Student accom­mo­da­tion generates reliable rental returns thanks to high and stable de-mand. 

EUR 2.7 billion required 

Accor­ding to estimates by the German student services organi-sation (DSW), invest­ment of EUR 2.7 billion is required to create 45,000 additional places in stu-dent accom­mo­da­tion in Germany – just for low-income students. 

1‑person house­holds in majority 

Accor­ding the Federal Statis­tical Office (Destatis), the most com-mon house­hold is the single-person house­hold (2011). A total of 37.2 per cent of all house­holds are occupied by only one person, and this figure climbs to as high as 42 per cent in large cities. Of those living alone, 17.6 per cent are younger than 30 – 34.1 per cent are over 64.