Residential investor, developer and operator Amro Partners has opened a new office in Amsterdam from which to spearhead its European expansion that will see the firm double its existing PBSA portfolio from 2,500 units to 5,000 by the end of 2024.
Led by newly appointed investment manager Thomas Bohnstedt, previously head of underwriting at LRC Group and prior to that an associate at Hudson Advisors, the office will target new purpose-built student housing opportunities in the Netherlands and Belgium.
Well-established in Iberia since 2018 and with nine projects already completed or under development, Amro is targeting early market share arising from a severe shortage of high quality, dedicated student beds against a backdrop of rising student populations. JLL estimates approximately 2.6 million more student beds are needed in Europe’s main student centres to meet existing demand, with growing student numbers set to push the shortage even higher.
‘We believe that this is only the start of the journey for the student housing market,’ Raj Kotecha, co-founder and managing director of Amro Partners told PropertEU in an interview. ‘Since the financial crisis the sector has been transformed from an alternative asset class to a mainstream investment particularly in the UK, but the same thing is now happening in continental Europe. It is driven by the same underlying factor, a mismatch between demand and supply which means many students today are not able to secure any housing and this is causing tension between international and local students as well.’
The Dutch market is increasingly appealing now that the UK has exited the EU. ‘If you look at student numbers in the UK post Brexit, the number of students originating from the EU is falling dramatically, because tuition fees have skyrocketed now that they are considered the same as international students, whereas before Brexit students from the EU would pay the same tuition fees as UK students. In our view, one of the major beneficiaries is the Dutch market, because Dutch universities offer courses taught in English, they are very international with a very good quality of life and safety standards, and the teaching level is good. This is why we are seeing international students numbers increasing rapidly in the Dutch market, particularly students originating from other EU countries. International students in the Netherlands this year versus 2021 grew by 11,000 and the housing gap is getting worse.’
Amro’s portfolio is being developed to be the leading portfolio of residential assets in Europe from an ESG perspective, with all projects targeting BREEAM Outstanding. It is analysing acquisition opportunities ranging in size from 200 – 500 beds in cities with healthy and growing student populations, with further office openings planned in Germany and the Nordics during 2023.
‘Our intention is to be the best in class in terms of sustainability,’ added Kotecha. In Seville, Spain, the company earlier this year opened the first BREEAM Outstanding student housing scheme in Continental Europe, he added. ‘We are also opening new projects in Madrid, Valencia and Pamplona which will all be BREEAM Outstanding certified.’
Thomas Bohnstedt, investment manager, added: ‘Amro’s dual focus, combining real estate and sustainability, appeals strongly to European investors and students alike. Our specialist sector knowledge and entrepreneurial approach put us in a strong position to become a truly pan-European developer and operator. We are already reviewing a strong pipeline of opportunities and I look forward to undertaking our first set of transactions in the coming months.’
Amro’s Kotecha said that the group is planning additions to the Amsterdam office and expects to hire a development manager and investment analyst in the near future. The opening of an office in Frankfurt, Germany, is also on the cards.
‘We are already assessing opportunities across a number of cities in the Netherlands such as Rotterdam, Amsterdam, Delft, and a few other research university cities.’ He continued: ‘We are assessing both existing operations and development opportunities. But we tend to think that a significant part of our activity will be development, simply because the number of operational assets of sufficient scale which are available are fairly limited.’