Amro Partners will be looking to grow its portfolio of purpose-built student accommodation (PBSA) assets to around 5,000 beds or about €1 bn in value over the next two years, according to Rainer Nonnengässer, who was appointed senior managing director in early January.
‘We are actively looking to buy schemes ranging from 150 to 500 beds and we are also interested in greenfield and brownfield developments, with a strong ESG focus,’ Nonnengässer told PropertyEU, adding that the firm is committed to becoming a net zero carbon business by the end of 2025. ‘We focus on the highest sustainability rating or Breeam Outstanding.’
The company, which currently has around 3,000 beds in its portfolio, is looking to expand to a number of new markets in Europe starting from Germany and The Netherlands. ‘We opened an office in Amsterdam in September last year and we are hoping to sign our first deal in this market in Q1. We expect to be able to sign a couple more deals by summer break.’
Headquartered in London, Amro expanded to Spain four years ago and has since built up a 3,000-bed portfolio in Iberia. ‘We are planning to further expand in Continental Europe, starting from Germany and the Netherlands and then potentially expanding into the Nordics and CEE at a later stage,’ he said.
Nonnengässer joined the business from International Campus Group where he was Executive Chairman and CEO, responsible for all acquisition, investment and asset management activity. Based in Frankfurt, Germany, the new Amro executive said he sees ‘a huge potential’ in the student housing market. ‘We believe opportunities are about to re-settle, providing us with a fresh start under new market conditions, pricing and operational costs,’ Nonnengässer said.
He continued: ‘Looking back to the beginning of 2022, the market experienced a shortfall of development activity as a result of the higher cost of financing and rising construction costs. Many developments have been put on hold although the demand for student beds continues to increase. We are seeing rents rise sharply, reflecting an increase of operational and financing costs. From the investors’ side I think it is fair to say that PBSA assets have proven to be a very resilient asset class and continue to attract an increasing amount of capital. However, a lot of investment structures are now underwriting under market assumptions that do not exist anymore. We expect that they will adjust their investment assumptions and raise new funds by spring at the latest.’