Investors pushed over €1 billion into student housing in five years: report
Investors have discovered the student housing market. Over the past five years, commercial parties invested over a billion euros into student housing. That amount increases if collaboration with idealistic student housing providers such as corporation DUWO and foundation SSH is added to the calculation, according to a study by real estate advisor Savills and De Volkskrant.
Student housing provider DUWO is now working with around 10 investors, including pension investors like Syntrus Achmea and Bouwinvest, but also private real estate fund Haerzathe. DUWO director Heerlen de Vreese speaks of a "turnaround" in the thinking of a "somewhat conservative" corporation sector, that generally wants to be the owner of the buildings it rents out. "We decided that we are not on earth to own as many bricks as possible. We want to give students an affordable roof over their heads", he said to the Volkskrant. DUWO therefore teamed up with investors. They own the buildings, DUWO manages them.
The only disadvantage DUWO sees in its partnership with investors, is that most contracts with investors have a term of no more than 10 years. After that, the investor decides whether they want to continue with cheap student housing, or whether they want to change the building's zoning or sell it. "We would prefer to buy after that period. But in principle, no investor bites on that", De Vreese said to the Volkskrant.
SSH joined forces with investors like Syntrus Achmea, and the De Waal family of the WE retail chain. The De Waal family's investment company bought the former provincial house of Utrecht, for example. More than 700 students live there now. SHH sees no issues in collaborating with corporate investors, Roeland Kreeft of the foundation said to the newspaper. "As long as the homes remain affordable."
According to real estate advisor Savills, traditional real estate investors have neglected student housing so far. Investors in student housing can look forward to continuous strong demand. The growth in the number of Dutch students is expected to level off somewhat in the coming years, but the percentage of foreign students will increase. And they can't live with their parents, so renting is their only option.
The large shortage of "normal" starter homes is also a plus for investors, according to Savills. People who used to look for larger rental homes or to buy a home, now have to settle for a small rental property. In that, they appreciate shared facilities. This blurs the boundaries between starter- and student housing, making the target group larger for investors.