International Campus, a Munich-based developer and operator of student accommodation, has entered the fund management arena with a target to raise a total of €250 million of equity commitments for an investment vehicle. The firm revealed today that it had raised €50 million so far in a first close for the fund, which is structured as a Luxembourg vehicle and for which it is aiming for an IRR to investors of 14 percent.
The fund's strategy is to develop eight modern student residential buildings with more than 2,400 apartments, all branded as “The Fizz”. The plan is to develop those buildings predominantly in its home market of Germany over the next 3 years to 5 years and exit within 5 years to 7 years.
Horst Lieder, chief executive officer, said: “We have raised €50 million of equity in a first closing and therefore enter directly into the investment stage. Talks with a number of further equity investors are currently underway.”
Lieder explained that, if the fund grew to €250 million in total equity, the firm would be able to amass a portfolio with a total investment volume of up to €800 million. The company also explained it was confident in the financing conditions in Germany, calling them “very favorable” in comparison with other countries. International Campus also said it would co-invest 5 percent to 6 percent of the capital of the fund.
Rolf Engel, chairman of the company’s board, added in the statement: “The strategy of creating a platform of this nature for a large-volume portfolio in the area of student housing provides an attractive product for institutional investors that is unlike anything currently available in Germany for this segment. This is another step forward in providing access for investors to student housing in Germany as a standalone asset.”
Though the company said the fund was unique in Germany, it would not be the first time a firm has used a fund for German student accommodation. Zug-based private equity real estate firm Corestate Capital entered the German student accommodation sector in 2008 when it launched the YOUNIQ brand. Shares in that owner operator are listed on the Frankfurt stock exchange, though Corestate still has a majority stake.
Separately, Corestate today announced it had won an asset management mandate from the administrator to DR Real Estate to manage 54 residential and four commercial properties mainly in northern Germany and North-Rhine Westphalia.