Creating and operating a successful pan-European portfolio in the Student Housing and Micro-Living sector is possible as well as desirable, and International Campus Group is determined to prove it, Rainer Nonnengässer, newly-appointed CEO, told Real Estate Day.
‘We want full coverage of the relevant markets in one portfolio,’ he said. ‘The mission is simple: cover core EU markets and build a portfolio of 20-30,000 beds.’
International Campus Group has a strong presence in Germany and Austria, is now expanding into Central and Eastern Europe and is actively looking at Italy and Spain. Last year Canadian asset manager Brookfield took a controlling stake in the company, which ‘gives us firepower and a tremendous opportunity,’ Nonnengässer said.
‘Our primary target is doing development, but in some markets we look at forward purchases, we find agreements with third-party developers at an early stage to ensure that the product delivered fits into our understanding with regards to specs and amenities and also how the economics work,’ he said.
International Campus Group is now expanding into CEE because the gap between supply and demand is huge, particularly in the student accommodation sector.
‘When it comes to CEE the focus is on students, because that’s where the demand is most obvious,’ Nonnengässer said. ‘In other, more mature markets like Germany the borders between asset classes are ceasing to exist. Over the next three to five years we will see products emerging that will bring an end to the name-tagging.’ Student housing, micro-living and co-living will all become facets of the same coin.
Investor appetite for the sector is still robust, he said: ‘There is still a lot of liquidity, money is still cheap and the list of targets is getting shorter on a daily basis, so I don’t think the trend of growing demand will come to abrupt end. I am strongly convinced that 2019 will be a positive year for the sector.’
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