With 26 institutions in the Times World Top 400, Germany has a student population of 2.6 million, 11.5% of which are international. Most accommodation is provided by Studentenwerk, a semi-governmental institution providing a range of services to college and university students. It is affordable by European standards, accommodation averaging just €220 per month. Wider private-sector investment has been relatively limited to date, and has tended to offer apartments rather than traditional student style residences.

Public institutions have been unable to satisfy demand for student accommodation, and the bed shortfall across Germany is estimated at 100,000. Despite rapid growth in the country’s student population, little accommodation has been developed since the 1990s when a slew of publically-funded properties were built.

Investor interest in the German market has been growing, and the sector saw $185m of big-ticket deals in 2013 according to RCA. Over the next two years 7,600 units are planned in key cities, although this still only represents an addition of 5.8% to existing stock. Frankfurt is set to see the most additional units, adding 25% to its stock in the next two years.

The number of students in Germany rose from 1.87 million in 2001 to 2.38 million in 2011, an increase of 26%. At the same time, international student numbers grew from 117,000 to 132,000. The reduction in tuition fees across nearly the whole of Germany to make almost all university courses free will continue to attract more international students as they become more cost aware.

The majority of German towns have exceptionally low provision rates, coupled with very low forecast levels of delivery. The average purpose built student housing provision rate among the top ranking German university cities is 13%. With the exception of Frankfurt and Darmstadt, the annual planned provision in all these cities is under 10%, and the majority are expected to see less than 5% added to their stock on an annual basis.

Berlin stands out as a very low provision market in a market set against one of the largest student populations in Europe, with little forecast delivery (just 4% of existing stock annual). Rents have increased by more than 25% in the past five years and vacancy rates have declined to below 2%.