‘Alternatives are becoming mainstream’

‘In 2030 we will not be talking about alternative sectors anymore, because they will be standard and mainstream, and renting will be the new normal,’ Samuel Vetrak, CEO, Bonard, told Real Asset Media’s European Alternative Investment Outlook 2020, which took place in Amsterdam recently.

The trend is being driven by the new generations that have a different mindset and investors and operators are adapting to the changing landscape.

Dirk Bakker, Head of EMEA Hotels, Colliers International, Asli Kutlucan, Chief Development Officer, Cycas Hospitality BV, Ron van Bloois, Partner, HEVO, Samuel Vetrak, CEO, BONARD and Crispijn Stulp, Country Head the Netherlands, AXA Investment Management discuss the opportunities for investment in Hotels, Student Housing, Healthcare and similar sectors.
Filmed at the Alternatives Investment Briefing, Amsterdam, November 2019 by Real Asset Media.

‘The young don’t want to own anything,’ said Asli Kutlucan, Chief Development Officer, Cycas Hospitality. ‘They will be in student accommodation to begin with, then move to micro or co-living or extended stay places as they progress in their careers. They will rent apartments and will end their lives in senior housing. That’s the lifecycle of the next generation’.

No wonder investors are piling into all the new forms of residential. Operators are already blurring the boundaries between student housing, co-living, micro-living and hospitality and it is a trend that is just beginning. 

‘We like merging a few concepts together under the same roof and becoming a hub,’ said Kutlucan. ‘We can provide different services to different people that go well together, for example have a lifestyle hotel for young professionals alongside student housing for mature students.’

Student housing has been on the most notable upward trajectory and has attracted institutional investors because it is liquid, transparent and counter-cyclical. There are now over 700 companies active in the sector and there will be consolidation ahead.

‘Finding capital is not a problem now, what is difficult is finding the right partner and the right assets in good locations,’ Vetrak said. There are investors with billions of euros looking at the Italian market, for example, but the problem is lack of opportunities.

‘It is a recession-proof asset class and that is why so many institutional investors are transferring capital from office and retail into student housing,’ he said. Most European Universities are aggressively marketing abroad, so the number of international students is set to grow even faster.

The PBSA market in the UK and Continental Europe is set to double to €6 bln.

Developers and investors are increasing their involvement but operators are in short supply. ‘A problem with student housing is the lack of operators,’ Vetrak said. ‘If there were more independent ones the sector would progress even faster’.

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