1 Asset Management together with Hanner will invest 25 million euros to student housing in Wroclaw

2024 03 13

The real estate development company Hanner together with the asset management company 1 Asset Management plans to develop student housing project worth 25 million EUR. The companies signed a preliminary contract for the purchase of a plot of land in Wrocław, Poland.

“With favorable conditions of the Polish market we see a lot of potential for investing in modern purpose built student accommodation (PBSA) projects. This time we are entering the promising segment of student housing in Wroclaw,” says chairman of the board Arvydas Avulis at Hanner.

After receiving the construction permit work is planned to start at the beginning of 2025, and the student accommodation will be opened for the academic year of 2026. The project will have 300 rooms and will accomodate 350 students.

Partnership with a Polish real estate developer

Management company 1 Asset Management has established a separate CEE Student Housing Fund whose strategic investor is Hanner. This fund develops projects in Poland and other Central and Eastern European countries. The newest project will be implemented together with Develia, one of the largest real estate developers in Poland.

According to the fund partner Matas Mockeliūnas, after the opening of the first co-living accommodation for students and young professionals in Krakow last year, new opportunities are actively being sought in other important academic cities in Poland and neighboring countries.

“The Polish market is very large: the demand for this type of housing in the country is high, and the competition in this segment is relatively low. The results achieved in the already operating projects in Lithuania, Latvia and Krakow give our partners and investors confidence in the investment strategy in this asset class”, says M. Mockeliūnas.

The prospects of polish market

According to Samuel Vetrak, director of global research and consulting firm Bonard, student housing is considered an attractive asset class among investors.

“Student housing has been recognized as a resilient asset class, displaying a counter-cyclical tendency with increasing demand, strong occupancies and high increase of the rent levels. The sector serves as a potential hedge for investors amid inflation and macroeconomic uncertainties, consequently generating significant interest among investors, particularly in such geographies as Poland, as the country provides to investors a combination of attractive returns and market size”, comments Samuel Vetrak, CEO of BONARD, a leading global research and advisory firm specializing in student housing.

With a student population surpassing 1.2 million, of which 8.6% originate from abroad, Poland stands as one of Europe’s largest hubs for students. However, according to BONARD, the nation grapples with a notable scarcity of student beds, with merely one in ten students gaining access to housing in student residences, most of which are outdated and provide only shared rooms and limited facilities.

“In Wroclaw alone, boasting 29 higher education institutions, including 6 globally ranked ones, the student population exceeds 104.5 thousand, yet only one in 36 mobile students coming to study to Wroclaw from other cities or countries secures access to high-quality student housing.

The demand primarily stems from international students, alongside a growing preference among the Polish students for high-quality living options. Over the past five years, there has been a substantial 35% surge in international student enrollment, exerting pressure on the local student housing market. Owing to robust demand and limited engagement from the student housing providers, Poland’s private student housing market has been witnessing stable high occupancy rates exceeding 98% and significant double-digit rent increase of 14% and 17% in the last two years.

“These indicators indicate favorable opportunities to invest in the Polish private student housing sector, and Wroclaw was chosen due to its attractive demographic situation and demand dynamics,” says M. Mockeliūnas.

The management company “1 Asset Management” started investing in private student houses in 2020. At that time, the fund “1AM European Student Housing Fund” was established and invested in Vilnius, Kaunas, Riga and Krakow. The total value of these projects exceeded 60 million euros. In 2023 a separate CEE Student Housing Fund was established, with the purpose of further portfolio investments both in Poland and in other regions of Central and Eastern Europe. The target size of the fund is 110 million euros.