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‘Institutional investors zooming in on Germany’

Christian Scheuerl, Managing Director, MPC Micro Living Development

The student housing and micro living sector is attracting more and more institutional investors who are interested in acquisitions but also in development, Christian Scheuerl, Managing Director, MPC Micro Living Development told Real Estate Day.

‘Institutional investors are craving for a chunk of the market in Germany and there is a lot of money flowing in,’ he said. ‘Most investors, however, prefer to be in the big cities but they don’t realise that the best yields are to be had in the smaller university towns’. 

The market is growing everywhere and there are still opportunities in big cities like Berlin, but brave investors who are not afraid of going to Heidelberg or Freiburg will do better, Scheuerl said, ‘because in the smaller cities you definitely have the chance to create the yields that you’re looking for’.

The group deals with all micro living residential products and has created a brand, STAYTOO, with 1,500 beds and eight schemes across Germany and a focus on good design and communal areas.  ‘Demand is such that we wouldn’t push the market too hard if we were trying for one STAYTOO apartment complex with 150 to 200 units in each university town’, he said.

The strategy is to be a developer and operator ‘that really creates value for investors by delivering a product which is suitable for students but also shows investors that we have done our homework and can deliver on all the little practical, technical and legal details that make their lives easier, without ever forgetting our tenants’, Scheuerl said. 

The work involves close cooperation and consultation with smaller developers to help them create a really good product.

As in the case of cities, with developments it is not always the case that big is best, he said: ‘It is easy to think of big tickets as being the most attractive for investors, but with thoughtful rationale you can see there are lots of opportunities for smaller developers’.

If you want to create a good product you have to be involved in the process from the very beginning right through to completion, he said: ‘You need to source the sites, come up with the perfect layouts, convince the local authorities, then control the construction process in a way that you deliver on time and on budget, and then finally persuade the students that they want to live there’.

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