Student housing


Student housing:
International Campus
issues Luxembourg fund

Dear Rea­ders,

a few weeks ago the win­ter term 2013/14 star­ted. In the past
year alo­ne, the­re were 2.5 mil­li­on stu­dents in Ger­man
uni­ver­si­ties – and the num­bers are incre­asing. The rese­arch
con­sul­tancy bul­wi­en­ge­sa esti­ma­tes that by 2015 the­re will be
about 2.8 mil­li­on stu­dents. Small-sca­le resi­den­ti­al
accom­mo­da­ti­on in attrac­ti­ve towns is in par­ti­cu­lar­ly short
sup­p­ly. It is pre­cis­e­ly in the­se cities whe­re stu­dents are
com­pe­ting for one- or two-room apart­ments with most­ly more
afflu­ent young pro­fes­sio­nals, com­mut­ers, and sin­gle peo­p­le.

The high demand has attrac­ted the atten­ti­on of deve­lo­pers and
inves­tors with a ran­ge of dif­fe­rent con­cepts, stra­te­gies and
pro­ducts. While stu­dent housing in Ger­ma­ny is by no means yet
an asset class in its own right, like resi­den­ti­al, offices or hotel
pro­per­ty, the mar­ket and demand for it are, howe­ver,
deve­lo­ping. In times of decli­ning returns on tra­di­tio­nal real
estate invest­ments, insti­tu­tio­nal inves­tors are sear­ching for
alter­na­ti­ves which com­bi­ne relia­ble cash flows with hig­her actu­al returns than the returns anti­ci­pa­ted by the mar­ket.

Inter­na­tio­nal Cam­pus has issued the first Stu­dent Housing fund
espe­ci­al­ly for the­se inves­tors. We are curr­ent­ly pro­vi­ding more
than 2,400 apart­ments as a capi­tal invest­ment and for the fund
in eight loca­ti­ons. Fur­ther pro­jects for the expan­si­on of our
port­fo­lio are in the pipe­line. You can find out more about the
fund in this edi­ti­on of our News­let­ter.

Kind regards

Horst Lie­der

CEO Inter­na­tio­nal Cam­pus AG

Overview of student
housing market in
winter term 2013/14

The stu­dent housing mar­ket is not
only very tight in Ger­man
metro­po­li­ses like Ham­burg, Ber­lin
and Frank­furt, but also in
num­e­rous smal­ler uni­ver­si­ty
towns like Frei­burg, Hano­ver or
Darm­stadt. The­re are seve­ral
news­pa­per reports of emer­gen­cy
accom­mo­da­ti­on, bizar­re flat­ma­te “audi­tions” and run-down rooms
far from the uni­ver­si­ty. The
enorm­ous demand for small-sca­le
accom­mo­da­ti­on from stu­dents is
also boos­ted by demand from
other groups—for exam­p­le, young
pro­fes­sio­nals, com­mut­ers or

Many students, little accommodation

Accor­ding to the Ger­man Natio­nal Asso­cia­ti­on for Stu­dent Affairs (Deut­sches Stu­den­ten­werk), at the start of the win­ter term 2013/14 the­re were more than 50,000 stu­dents on the wai­ting lists. At the same time the­re are only about 230,000 sub­si­di­zed places in halls of resi­dence. The­re are appro­xi­m­ate­ly ano­ther fur­ther 10,000 places under con­s­truc­tion or in the plan­ning stage. The stu­dent asso­cia­ti­ons are thus pro­vi­ding less than 10% of stu­dent housing. The stu­dent asso­cia­ti­ons (Stu­den­ten­wer­ke) pre­do­mi­nant­ly pro­vi­de accom­mo­da­ti­on for tho­se depen­dent on publicly-fun­ded accom­mo­da­ti­on.

In the pri­va­te housing mar­ket rents vary accor­ding to regi­on, imme­dia­te loca­ti­on, size, fit-out, mar­ket seg­ment –  and of cour­se the attrac­ti­ve­ness of the pro­duct brand. Month­ly apart­ment ren­tals in attrac­ti­ve uni­ver­si­ty towns ran­ge from €350 –  600.

Current studies of student housing

Study: Macro-scoring the student housing market

In Macro-scoring Ger­man Stu­dent Housing Mar­ket from Octo­ber 2013 the rese­arch experts from bul­wi­en­ge­sa eva­lua­ted all Ger­man uni­ver­si­ty cities with more than 7,000 stu­dents in a scoring. Accor­ding to the ana­ly­sis of 18 varia­bles from the cate­go­ries, sta­tus quo, histo­ry and per­spec­ti­ve, 25 out of 76 towns pro­vi­de very good con­di­ti­ons for invest­ment in stu­dent housing. The dri­vers of a high long-term demand are the incre­asing pro­por­ti­on of tho­se entit­led to stu­dy as well as the incre­asing num­ber of uni­ver­si­ty ent­rants start­ing their stu­dies. The first five places, with an excel­lent reward/risk ratio, are Munich (80.9%), Hano­ver (77%), Colo­gne (75%), Ber­lin  (73.8%) and Frank­furt (73.6%). bul­wi­en­ge­sa con­siders stu­dent housing to be a pro­fi­ta­ble invest­ment pro­duct, which can achie­ve a long-term and secu­re rate of return of 5 – 6%.

Study: Spotlight European

Student Housing

In their stu­dy on Spot­light Euro­pean Stu­dent Housing, the inter­na­tio­nal pro­per­ty ser­vices pro­vi­der Savills, came to the con­clu­si­on: “The Stu­dent housing invest­ment mar­ket matures”. Inves­tors loo­king for a return found stu­dent housing pro­vi­ded a sta­ble cash flow. The returns in prime loca­ti­ons reach about 5.5% in Ger­ma­ny, Gre­at Bri­tain and France. Rising inco­mes, living stan­dards and rapidly incre­asing num­bers of for­eign stu­dents ensu­re that the­re is a signi­fi­cant group of stu­dents with very high expec­ta­ti­ons for their accom­mo­da­ti­on. In this regard Savills empha­sise that, for the most part, the­re are no tui­ti­on fees any­mo­re in Ger­ma­ny.

Study: Cities with tight Student Housing markets

In the ran­king Tight Stu­dent Housing mar­kets in Ger­ma­ny, the Ber­lin pro­per­ty deve­lo­per GBI AG ana­ly­ses 81 uni­ver­si­ty sites with 22 varia­bles. Today 25 attrac­ti­ve cities and uni­ver­si­ty towns have alre­a­dy very tight stu­dent housing mar­kets – also in the next deca­des the­se cities will have an enorm­ous demand for stu­dent accom­mo­da­ti­ons. Bes­i­de metro­po­li­ses like Munich, Ham­burg and Frank­furt, the­re is a very tight housing mar­ket for stu­dents e.g. in Bre­men, Frei­burg and Hano­ver. Stu­dy: Invest in Stu­dent Housing In their stu­dy Invest­ment in Stu­dent Housing in May 2013, Bouw­fonds Invest­ment Manage­ment, an issuing house belon­ging to the Dutch Rabo­bank Group, esti­ma­ted the total invest­ment in Ger­ma­ny, France, Gre­at Bri­tain and the Net­her­lands as being around €300 bn (with an avera­ge value of €45,000 per room). 48% of all inter­na­tio­nal stu­dents come to Euro­pe to stu­dy. Ger­ma­ny is one of the top five desti­na­ti­ons for stu­dents in the world. Here the­re are now more than 600 mas­ter’s cour­ses offe­red in the Eng­lish lan­guage. Becau­se stu­dent apart­ments offer­at­trac­ti­ve returns with a low risk pro­fi­le, stu­dent housing is to be an attrac­ti­ve asset class which can pro­vi­de solid capi­tal growth for an exis­ting port­fo­lio.

Three questions for Horst Lieder about the student housing fund:

International Campus has founded an investment trust; can you tell us more about it?

Inter­na­tio­nal Cam­pus AG has laun­ched an invest­ment trust “Inter­na­tio­nal Cam­pus Stu­dent I SCA” based in Luxem­bourg for the expan­si­on of the plat­form. In a first clo­sing we have alre­a­dy acqui­red €50 m of equi­ty capi­tal. That puts us direct­ly into the invest­ment pha­se. The plan­ned equi­ty capi­tal volu­me is €250 – 300 m, with which we will be able to expand a port­fo­lio with a total volu­me of €600 – 800 m.

For whom would this be an attractive investment opportunity?

The par­ti­ci­pa­ti­on offer of the fund is direc­ted towards pro­fes­sio­nal inves­tors who wish to invest a mini­mum of €10 m within the con­text of a pri­va­te pla­ce­ment. The expec­ted term is five to seven years – with a tar­get return on equi­ty capi­tal (IRR) amoun­ting to 14 per cent.

What strategy are you pursuing?

Curr­ent­ly Inter­na­tio­nal Cam­pus is pro­vi­ding more than 2,200 stu­dent apart­ments for the fund in seven Ger­man cities, for exam­p­le in Frank­furt, Ber­lin and Hano­ver. Fur­ther pro­jects are alre­a­dy in the pipe­line and we are con­stant­ly asses­sing fur­ther loca­ti­ons to expand our port­fo­lio. Our objec­ti­ve is to be one of the lea­ding pro­vi­ders of stu­dent housing in Ger­ma­ny within five years.


Eleven elite universities I

n Ger­ma­ny today the­re are ele­ven “Eli­te Uni­ver­si­ties”, which recei­ve addi­tio­nal public fun­ding for their rese­arch and future deve­lo­p­ment plans. Among the cities with eli­te uni­ver­si­ties are Bre­men and Ber­lin.

CBRE foresees a demand for 47,000 apartments

In their Mar­ket Report on Stu­dent Housing from April 2013, the pro­per­ty con­sul­tancy CBRE esti­ma­te that the­re is a cur­rent demand for 47,000 addi­tio­nal stu­dent apart­ments in the upper seg­ment alo­ne.

Berlin continues to grow

The­re are around 3.375 mil­li­on peo­p­le living in Ber­lin (Decem­ber 2012). Alo­ne in 2012 the popu­la­ti­on increased by 41,324 – while this year saw only 4,500 resi­den­ti­al units being com­ple­ted. In the capi­tal the­re

are more than 160,000 stu­dents atten­ding 42 uni­ver­si­ties.

More single-person households

The Fede­ral Sta­tis­ti­cal Office (Sta­tis­ti­sches Bun­des­amt) has estab­lished, that 41 per cent of all Ger­man house­holds con­sist of only one per­son – whe­re­as in 1991 it was still only 34 per cent. In cities like Ber­lin or Frank­furt

the pro­por­ti­on of sin­gle-per­son house­holds is over 50 per cent.

€864 income

Accor­ding to the 20th Social Sur­vey, published in sum­mer 2013 by the Ger­man Natio­nal Asso­cia­ti­on for Stu­dent Affairs (Deut­sche Stu­den­ten­wer­ke), stu­dents in Ger­ma­ny have an avera­ge dis­posable month­ly inco­me of €864. Accor­ding to the sur­vey 26% of stu­dents have a month­ly inco­me of over €1,000, but the stu­dy is based on data from 2010-12. We assu­me that this pro­por­ti­on is pro­ba­b­ly now about 30% as inco­mes and rents have risen to some ext­ent. In the past two years, many Ger­man cities have seen rents rise by 5–10% per year. Accor­ding to the sur­vey, bet­ween 2010 and 2012 about 21% of stu­dents were pay­ing more than €350 for rent and ancil­la­ry cos­ts. The avera­ge rent was €298. 62% of all stu­dent are on full-time first degree cour­ses, are living away from home and are sin­gle.

Young people “swarming”

Empi­ri­ca has estab­lished that the group of 25- to 30-year-olds is con­cen­t­ra­ting in cer­tain sel­ec­ted cities to a grea­ter ext­ent than in the past. The pro­por­ti­on of young peo­p­le is now more than 30% abo­ve the Ger­man avera­ge in 18 Ger­man cities, inclu­ding Frei­burg, Leip­zig, Jena, Munich and Darm­stadt.

World Universities 2013

Accor­ding to the Aca­de­mic Ran­king of World Uni­ver­si­ties 2013, the­re are four Ger­man uni­ver­si­ties among the 100 best of the world: TU Munich and the uni­ver­si­ties of Hei­del­berg, Munich and Frei­burg.

Germany still attractive

In 2012 the­re were a total of 265,000 regis­tered for­eign stu­dents in Ger­ma­ny. By 2020 the num­ber of inter­na­tio­nal stu­dents is expec­ted to rise to 300,000.

Event tip – IC at GRI

Inter­na­tio­nal Cam­pus will be dis­cus­sing the sub­ject of stu­dent housing with num­e­rous experts at the Ger­man GRI in Frank­furt on 7–8 May 2014.

Press contact

We are happy to answer press enquiries. Please send us a message.