First CBRE

11. April 2013
09:55

Uhr

First CBRE “Market Report Student Accommodation” Proves a
Need for Investment in Germany of Up to 4.1 Billion Euro in High
Quality Student Apartments

Up to 47,000 additional single apartments required in the upper segment
There is a lack of higher quality apartments in 53 of the 61 university locations
analysed
With populations under 300,000, Karlsruhe, Freiburg and Münster are the most promising medium-sized cities from the perspective of an investor
Well-known university cities such as Göttingen or Marburg fall only in the midrange
26 indicators check investment potential in the location, for the first time with detailed consideration of the university landscape

For almost 87 percent of the university locations in
Germany with over 8,000 students, there is further demand in the segment of high quality
single apartments alone. According to calculations by internationally active property
consultancy company CBRE, there are currently around 260,000 potential customers for high
quality housing among the 1.85 million students who were studying at the universities of the
61 locations investigated during the 2011/2012 winter semester. With respect to the situation
on the housing market, in a conservative calculation, CBRE infers additional demand for
around 47,000 high quality single apartments. This corresponds to a total investment volume
of up to 4.11 billion Euro – with an average apartment size of 25 square metres and overall
investment costs of 3,500 Euro per square metre for an institutional end investor. The stable
situation on the German housing market and the continuing high demand for small housing
offer excellent conditions for the investment niche of student housing.

These are the results of the first “Market Report Student Accommodation”, which CBRE
presented yesterday together with International Campus and Youniq in Frankfurt am Main.
The detailed study included all university locations with more than 8,000 students enrolled in
the 2011/2012 winter semester. 61 cities in Germany were therefore analysed and ranked.

In addition to the housing market and socioeconomic figures, for the first time, the
“2012/2013 Market Report Student Accommodation” has taken into account the particularly
relevant – for the asset class of student accommodation – university landscape in the 144-
page analysis.

A demand analysis has been conducted for each of the individual locations: “the value added
by our market report lies in the estimate of the additional demand for high quality student
accommodation in a specific location. This estimate offers German and international
investors an excellent guide for an investment decision in the asset class of student
accommodation and allows direct comparison of all the relevant locations in Germany,”
explains Dr. Henrik Baumunk, Head of Residential Valuation at CBRE. The highest overall
demand for additional high quality student accommodation – outside of the metropolises – is
shown by the medium-sized cities of Darmstadt, Münster and Gießen due to their favourable
underlying conditions.

‍The top 20 university locations by calculated additional demand (maximum) for high quality single apartments

In addition to population development and student numbers the figures analysed also include
details of the number of places in student halls and of the rate of placement in
accommodation in the respective university location. On the level of the university landscape,
the factors taken into account include non-university facilities, support rate and the
availability of external funding. “With this study, we want to contribute greater transparency in
the market for student and small housing. The forecast of the conference of culture ministers
on first year student figures for 2012 is now already being significantly exceeded. We are
therefore expecting growing student numbers, which will further boost demand. As such, the
demand shown by CBRE for almost 50,000 additional high quality apartments will see a
further significant increase in the coming years,” International Campus AG Chairman Horst
Lieder comments on the analysis.

The CBRE “2012/2013 Market Report Student Accommodation” is based on extensive
qualitative research and numerical data available by September 2012. “No other publication
about the student housing market in Germany features a comparable level of detail. The
analysis enables decision-makers from the economy, administration and politics as well as
interested members of the public to gain a comprehensive overview. Thanks to the market
report, it is possible to make investment decisions on a more founded basis and to provide
international investors with an initial estimate of the additional demand for high quality
student apartments,” says Rainer Nonnengässer, Chairman of YOUNIQ AG.

According to calculations by CBRE, there is a need for investment in additional high quality
student apartments in a total of 53 of the 61 university and college cities considered. The
locations with the greatest potential for successful investments in the long term are Munich,
Hamburg and Frankfurt am Main. Here, a strained housing market is accompanied by a low
rate of student placement in accommodation in student halls. Coupled with a relatively high
student income and stable development prospects for these cities, CBRE is therefore
expecting continued high demand for sophisticated student accommodation.

If the university landscape category is considered on its own then Munich, Stuttgart and
Berlin hold the top spots. In the category of underlying socioeconomic conditions, Munich,
Erlangen and Regensburg are the ranking winners and in the housing market category, the
same locations as in the overall ranking are most convincing – only the order differs
(Hamburg 1st, Frankfurt 2nd, Munich 3rd).

In the evaluation of the 61 university locations examined with respect to potential for
successful investments in the long term, 45 locations achieve over 50 percent of the
maximum achievable point score. A maximum of 10 points can be awarded in the overall
ranking and in each of the three subcategories, although the category of socioeconomic
figures has a 35 percent impact, the housing market category has a 40 percent impact and
the university landscape category has a 25 percent impact on the overall result for the
respective city.

Top 10 loctions with the greatest potential — ‍Top 10 locations with the greatest potential for successful investments in the long term in high quality student apartments

‍

Cities in northern Germany in particular show deficits with respect to the underlying
socioeconomic conditions such as purchasing power and population projection. Even well-
known university locations such as Göttingen and Marburg achieve only the midrange due to
their only average projections in buying power and population. By contrast, many medium-
sized cities such as Karlsruhe, Münster and Freiburg im Breisgau are of greater interest for
investors because they display attractive socioeconomic figures and a relatively strained
housing market with no appreciable vacancy rate and relatively high quoted rents over the 8
Euro mark. Regional centres and medium-sized cities in Baden-Württemberg, Bavaria and
North Rhine-Westphalia are particularly promising for involvement in the student
accommodation market. In the east of Germany, Berlin, Potsdam, Dresden and Jena
likewise perform well, being placed in the upper half of the overall ranking. The relaxed
housing marketing in Dresden, Jena and Leipzig is principally responsible for the fact that the
investment conditions there are not rated more positively.

The complete “2012/2013 Market Report Student Accommodation” can be obtained from
CBRE for a nominal fee of 4,500 Euro. Journalists can request a free copy of the market
report from CBRE.