UK developer Crosslane and property company Bauer Capital, advised by Savills, have agreed a joint venture to work together on student housing projects and portfolios  in Germany. For Crosslane this  will be the company’s first venture into the student sector in Europe.

Following the recent successful  launch of its open-ended retail fund, the Victus European Student Accommodation Fund, Crosslane and Bauer Capital intend to acquire, develop and construct up to circa 3,000-5,000 student beds throughout the major University towns in Germany. With input from Savills an acquisition criteria has been agreed resulting in an initial list of 20 university target cities, which includes Munich, Hamburg and Oldenburg.

According to research from Savills the average growth of the total student population in Germany since 2008 is 5.50% per annum with the current number of total registered students at approximately 2,501,990. This compares to a total number of places in student halls of 228,500 (data from Deutsches Studentenwerk), showing a provision rate of 11% and a clear undersupply in the country, especially when compared with the UK where the provision rate is 23.7%. Savills also notes that yields for student residences in Germany have been stable over recent years reflecting the strength of this sector and currently stand at 5.50% for prime and 6.75% for secondary.

Andrew Jamieson at Crosslane says:  “Having identified an opportunity to satisfy some of the increasing demand for student housing in Germany, we are very pleased to be progressing our first project in Europe with Bauer Capital, who have extensive local knowledge in the sector.

“We are progressing  a number of transactions with about 800 beds to be acquired in the next months”

Marcus Roberts, head of student investment at Savills, comments: “Despite the challenges in the wider economy, student registration figures across Europe and particularly in Germany have remained robust. However, there is a significant imbalance between supply and demand, which makes new ventures like the one between Crosslane and Bauer Capital absolutely vital.”