Berlin-based Catella Residential Investment Management (CRIM) has significantly expanded the investment volume of the Catella European Student Housing Fund II (CESHF II) to almost €150 million with the acquisition of two student residences in Berlin and Greater Paris for approximately €60 million.
The latest deals follow hard on the heels of the Fund’s second closing in May when it raised €45 million. Less than 10 months since its launch, the Fund has now acquired six properties with almost 1,500 residential units in four countries across Europe, with a projected internal rate of return (IRR) of 5% per year and a direct income return of 3.5%. CESHF II is the successor of Catella’s first European Student Housing Fund, which has generated an IRR of 7% per annum since its launch in 2013 until mid-2020.
Michael Keune, Managing Director at CRIM, said: “The market for education and thus also for student housing is in a state of upheaval in the Covid-19 era. Most universities are closed and online seminars currently dominate the curriculum. However, the limitations of this way of learning and the absence of a social component have also become clearly visible. We expect there will be a mix of both forms of learning -- virtual and physical – in the future. We also think we will see the same trend as when the dotcom bubble burst in 2000 and after the onset of the Great Financial Crisis in 2008, with student numbers increasing significantly during and after the Covid-19 crisis and stimulating demand for student housing in a highly underserved market.”
In June 2020, the unemployment rate of young people in Germany aged under 25 was more than 40% above the comparable level in 2019, Keune added. “The corona generation will be forced to place even greater emphasis on education than previous generations as it will be more difficult for them to find a job, both during and after completing their studies. Already the under-25 age group is being hit the hardest by the crisis.”
In Berlin -- the largest market for student housing in Germany with approximately 195,000 students out of a total population of around 3.8 million -- the Fund has purchased a property in the northeastern district of Weißensee for approximately €40 million. Weißensee has undergone a major upgrading in recent years, primarily due to its proximity to the extremely popular but now very expensive districts of Prenzlauer Berg and Pankow. The planned five-storey student residence comprises 261 modern fully furnished units with compact floor plans varying between 16 and 41 sqm over a total surface area of approximately 6,300 sqm. The design is by internationally renowned Swiss architect Max Dudler.
In France, the Fund has acquired a project development from Imodev comprising 240 apartments with a rentable area of 5,108 sqm incl. common space of 481 sqm in Cergy in the Île-de-France region, about 25 km northwest of Paris, for around €25 million. With over 200,000 inhabitants and 30,000 students, Cergy offers more than 200 training courses and numerous higher education instititutions, including a multidisciplinary university and prestigious schools such as ESSEC, ENSEA and EISTI. The city’s flagship university ESSEC is ranked among the top five universities in the world by the Financial Times. Many leading companies also have their headquarters in the city including 3M, Thalès, Renault, ABB and Louis Vuitton.
Alexander Brüning, fund manager at CRIM, said: “In terms of student housing, Berlin and Paris have supply rates of around 10%, which means that only one in 10 students in both these cities will find a place to live. Creating affordable housing for students is therefore at least as important today as it was before the Covid-19 crisis. Affordable student residences in good locations with access to top universities also continue to offer investors attractive and stable returns.”
The development acquired in Cergy is located at a distance of just 300 metres from the Cergy-Préfecture railway station which is currently undergoing a comprehensive overhaul as part of a plan to upgrade the city’s infrastructure. The student residences incorporate next-generation concepts and services including several common rooms. In total the complex will provide 447 sqm of communal space including a reception, cafeteria, co-working area, laundry, shop, gym and a terrace, operated by Twenty Campus (Group Sergic).
BE REAL Investment Management, CRIM’s local partner in France for asset and investment management, advised on the transaction. Frankfurt-based Institutional Investment Partners GmbH (2IP) provides the AIFM platform for CESHF II.
About Catella Residential Investment Management GmbH (CRIM)
Catella launched its first European residential fund in 2007 with a volume of more than €1 billion and it has since achieved an average net return for investors of 8.5% per year until the end of Q2 2020. The team also launched the first dedicated European Student Housing Fund in 2013.
CRIM is a subsidiary of the Stockholm-based Catella AB group and its residential real estate business comprises portfolio management, acquisitions, sales and asset management. CRIM manages and advises several funds and mandates and has assets under management of over €4 billion in 10 European countries.
For more information contact:
Lisette van der Ham
Head of PR & Corporate Communications
Catella Residential Investment Management GmbH
Upper West, Kantstraße 164,
M: +31 (0)6 83200561