‘Hybrid models are the future’
Resi is shape-shifting. The new hybrid models accommodate different people at different times, like students during the academic year and tourists in the summer or young people in education or in work.
‘We focus on people in education and unsettled professionals, because their requirements are very similar,’ Rainer Nonnengasser,CEO, International Campus, told The Real Estate Day. ‘There is a lot of homogeneity on the product side, so both groups can easily be integrated’.
Students and young professionals want to be close to the city centre, want good design, leisure facilities and large shared spaces. They are both highly mobile and prefer renting to owning.
‘We see the boundaries between these two groups breaking down,’ said Rienk Oosterhof, Development Director, The Student Hotel. ‘The same room is fine for both, although we may add a kitchenette for professionals’.
The key words are mobility, flexibility, community, connectivity and also affordability.
‘Mobility is key, so flexibility is needed in housing choices,’ said Clare Thomas, Partner, CMS. ‘That’s why the product is always evolving. In future there will be even more focus on the technology that will keep the community connected and there will be more all-inclusive offers’.
These trends will lead to the evolution of rental solutions in markets where rental is underdeveloped.
‘All borderlines are melting away,’ said Nonnengasser. ‘Soon restrictive labels will disappear and there will just be one blended product which meets the requirements of young people’.
Some stretch beyond the younger generations. The Student Hotel has a hybrid model that combines student housing, co-working and co-living and rents out rooms to tourists in the summer. ‘We’re open to everyone regardless of age and 50% of our customers are not students,’ said Oosterhof. ‘We call them young at heart’.
The tourism element is crucial because the place must be busy 12 months a year.
‘In the past we did not look at Milan, despite its big student population, because the numbers didn’t work in the summer,’ he said. ‘But now that the city is attracting many more tourists we are very interested in Milan’.
Italy, France, Iberia and Ireland are the most attractive markets because of their potential, but the trend is taking root all across Europe and attracting the attention of developers and institutional investors.
However, ‘banks don’t always understand these new asset classes, which leaves room for alternative lenders like us to underwrite the projects,’ said Thibault Valla, Debt & Special Situations, LaSalle Investment Management. ‘It is a recurrent theme that developers start with student housing and then branch out to other resi products. We have a big pipeline in co-living’.
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