Victus offers investors European student accommodation opportunity with German deal
The Victus European Student Accommodation Fund has acquired a 179-bed property in Oldenburg, Germany.
The fund bought the property from joint venture (JV) partners Crosslane Capital and Bauer Capital. The JV has identified a number of other investment opportunities in Germany in response to the undersupply of student accommodation in the country. The JV has secured these by option for potential purchase by the fund.
Victus is the first fund to identify and act upon the perceived opportunity in Europe. The fund was established to invest in a blend of mature existing properties and new developments in major university cities across Europe, and is successfully executing that investment policy.
Andrew Henton, chairman of the Victus Fund, says: “We believe that investors are looking for the next opportunity in the student accommodation asset class, and that Victus is perfectly placed to take advantage of the evolving market. This deal evidences our commitment to Europe and our ability to capture the opportunities it offers.
“The student accommodation model is well proven in the UK and has provided investors with positive and relatively stable returns. Victus is the first fund of its type to also target opportunities on the European mainland, which is markedly less competitive for investors compared to the UK.
“This transaction has the dual benefits of diversifying geographic risk while also broadening the appeal of the fund to multi-currency investors who are putting money into the asset class for the first time.”
The Oldenburg purpose-built student accommodation property is fully let and will undergo a rolling refurbishment programme. This will include redecoration, new flooring, kitchen and bathroom replacements and new furniture.
The property comprises 178 units, with 164 single cluster rooms, 13 studios and a two-bedroom apartment. It was built in the 1970s upon the opening of The University of Oldenburg.
Andrew Jamieson from Crosslane Fund Managers says: “The student accommodation market in mainland Europe is thought to be10-15 years behind the UK, and nearly 80 per cent of German students are not accommodated in student halls but rent in the private housing market or remain at home instead.
“In Oldenburg alone, there are only 1,600 beds serving 14,000 students; a backdrop that presents an excellent opportunity for property investors and developers.”
According to the latest figures from Savills , there is a sizeable “investor sweet spot” for student accommodation in specific cities across Europe. Savills provided valuation advice to the purchaser in this transaction.
Crosslane Fund Managers has a track record in the sector having previously created two UK student accommodation funds. The fund will work with joint venture partners and local developers within university towns to gain regional insight, complementing Victus' internal property and investment expertise. The target annual return of the fund is 10 to 12 per cent per annum.