Global Expert Guide
Germany Q
want autonomy and to live in their own apartment including their own bathroom and kitchen. They also do not want to resign to be a part of a community and meet fellow students easily. For that reason we are offering our students an ideal combination of privacy and community.
What is the YOUNIQ Concept?
The YOUNIQ Concept is our so called “plug&study” concept. It was empirically back-tested to make sure we really meet the requirements of today’s students. This concept includes making the apartments the optimum size, with the optimum fittings; ensuring that they are completely furnished, including internet connectivity and cable TV; and that they are rented out on an all-in rent, one fixed amount covering all utilities and rent, no delayed payments, giving a high level of transparency to the student. The idea of this brand is comparable to that of a hotel group, it ensures we have a roll-out all over Germany in the relevant places, and that students will find the same concept in Frankfurt as in Munich or any other city in terms of quality, content and style. This concept is our vehicle to become the accommodation of choice in the student sector.
Q
YOUNIQ owns properties that are spread across 14 locations
nationwide, including Munich, Erlangen, Karlsruhe, Bayreuth, Lübeck, Potsdam, Frankfurt am Main, Mainz, and Leipzig. Would you invest in making student properties abroad, or are you aiming to stay in Germany?
Our strategy is to establish a robust coverage in Germany for the next years, and then expand into European markets which do not have an institutionalised structure. In addition to that, due to the fact that we are the market leader in Germany, we have frequent contact with
investors, developers, asset-holders across the relevant European markets because many of these individuals are interested in joint ventures and developing similar concepts in their countries. So we are taking a close look at Austria and Switzerland, because it is German speaking and has a border with Germany – there is a certain traffic, also of students; the Netherlands is also quite attractive, as are the Nordics.
the German market bears a lot of advantages for investors, e.g. low interest rates and a wide-range party distressed portfolios likely to come onto the market at attractive discounts.
In the long run, the CEE countries are interesting; Hungary, Poland and the Czech Republic in particular where there is now an increasing trend towards higher education. Nevertheless the German market bears so much potential for our business model – that is why for now our focus will remain here.
Q
Germany has long been viewed as a popular destination for investment. To what do you attribute this?
Germany is still a very popular destination for investments. I believe this depends on different facts. First, real estate in Germany is inexpensive compared to many other European Countries. Apartments cost an average of about 2,000 euros a square meter in Berlin and 3,600 euros in Munich, Germany’s most
expensive city, according to data compiled by Jones Lang LaSalle Inc. That compares with 7,000 euros per square meter in Paris and 9,500 euros per square meter in London. Second, the demand for living space on the German residential market is still not satisfied. And as long as the central banks are keeping the interest rates at a record low, the German real estate market stays attractive.
Q
What, in your opinion, are the incentives and restrictions of foreign investment in Germany?
As I mentioned before, the German market bears a lot of advantages for investors, e.g. low interest rates and a wide-range party distressed portfolios likely to come onto the market at attractive discounts. Previously, in the past decade, the number of households in Germany grew, as more people chose to live by themselves. Especially in large cities are many more one-person- households. Besides the demand for living space, there is also a conspicuous shortage of student apartments. Although student housing still is a market niche in Germany, investors now are beginning to discover this sector with its high investment and growth potential.
Has this altered much during the last four years since the beginning of the financial crisis? If so, how?
Q
With the beginning of the financial crisis investors have invested significantly less in German properties with the result that the real estate transaction temporary crashed down. But in 2012 they spent 3.3 billion euros in the first half, the most since 2008, and more than the 2.4 billion euros invested in 2011. This showed that the German residential market is still attractive for foreign investors. Not least because of the fact that residential buildings are known to be a safe investment and a good hedge against inflation.
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