‘Demand from young professionals is very strong,’ said Philipp Rohweder, vice-president of investments at Corestate Capital. ‘We now see micro living an asset class in itself, and student housing as a subsection of that asset class.’ Many young professionals now prefer to rent, not because they cannot afford to buy but because they like the flexibility and mobility that renting allows, he noted.

‘2017 will be a fantastic year for the industry in Germany and in Europe,’ said Rainer Nonnengasser, CEO of MPC Micro Living Development. ‘The urbanisation trend continues, rents are rising and there is a lot of room for new development in this market segment. Supply is just not keeping up with demand.’

Relocation to other cities for work

Another trend that is working in micro living’s favour, said Nonnengasser, is the opportunity it provides for people to move to another city for work reasons while leaving their families behind: ‘This contributes to the demand for simple, efficient and flexible micro living. It is a niche that is growing strongly, and not just in Germany.’

The urbanisation trend means that investors are increasingly focusing on cities that are likely to grow in population and attract investment in the future. By 2030 the forecast is that 60% of the population in Germany will be living in urban environments. The same trend is visible in the Netherlands, where, for example, 50% of the student population in Maastricht comes from outside Holland and needs accommodation.

The market is very promising but also very fragmented in Europe, said Roelfke Buitink, senior research manager at Bouwfonds Investment Management: ‘It is very difficult to create a pan-European investment strategy, because regulations and markets vary so much in different countries, and sometimes also between cities in the same country.’

US is 10 years ahead of UK

A look at the US and UK markets paints a good idea of what may lie ahead for Europe. ‘The US is 10 years ahead of the UK and the UK is five years ahead of Europe, so you can see the main trends evolving,’ said Daniel Gorzawski, managing director and head of Europe for Harrison Street. ‘We are taking our US experience as the largest private owner of student housing in the US and we now see a lot of opportunities in Europe, where we have had a presence since 2015.’

The prospects are positive, he said: increasing student populations and a constant improvement in accommodation standards, driven by the requirements of international students. ‘The number one request is wifi and superfast broadband,’ he said. ‘The second is study lounges, because rooms are getting smaller and today’s students actually focus on studying. The bars and party rooms of the past have gone. Then come gyms and pools. But it is a very dynamic, fast-changing market and you need to keep up with the latest trends.’