US investor buys Campus Diemen Zuid

The American real estate investor Greystar has purchased a campus with student residences in Diemen-Zuid. The campus is comprised of five buildings with 939 individual apartments and various stores. The price has not yet been announced, but according to real estate advisor CBRE, it is the biggest transaction in student residencies in the Netherlands.

In the past years the investment category is becoming more popular in the Netherlands. Last Tuesday ABP announced that it invested €100 million in The Student Hotel, a provider of luxury student residencies and short-stay hotel rooms. Also foreign investors, such as the German International Campus and the American private-equity firm Perella Weinberg Real Estate invested millions in the construction of student residences earlier. Real estate advisor Savills calculated that in 2015 and 2016 there will be 5,500 student rooms added in Amsterdam alone, with a total of 10,000 added in all of the Netherlands.

Yields

Investors are attracted by the yields of between 5.5% and 8% that are being made on luxury student residencies. The investors also count on a stable future for the industry due to the current shortage of similar accommodations. However, trade organization Kences predicted this week that the number of students will not grow as fast as initially expected caused by the recent elimination of the study grants.

The campus at Diemen was constructed by developer Snippe, Construction Company Van Wijnen, and Ramphastos Investments, owned by the well-known entrepreneur Marcel Boekhoorn, who transformed 50,000 cubic meters of empty offices into luxury student residiences. There also are facilities on campus like a hair dresser and an employment agency. The campus was bought for a small amount of €15.5 million. Altogether, €70 million is said to have been invested, partially funded by real estate bank FGH (Rabobank).

Greystar plans to grow rapidly in Europe.

Originally published in Financieele Dagblad, 2 October 2015