Responding to rising demand and the growing importance of alternative living concepts, Aareal Bank will launch a dedicated department “Alternative Living”. The new team will be headed by Benjamin Walter, who joined Aareal Bank from Union Investment Real Estate GmbH. The new team’s purpose is to further expand the Bank’s financing activities in student housing (purpose-built student accommodation, PBSA) and co-living, leveraging Aareal’s specialist expertise.
PBSA are purpose-built buildings for students, usually located in the vicinity of universities and colleges. Co-living refers to shared housing for a limited period of time, mostly found in urban areas.
“As the number of students at universities and colleges around the world rises, so does the demand for high-quality student accommodation,” said Bettina Graef-Parker, Managing Director of Special Property Finance at Aareal Bank. “A structural shortage of supply, combined with significant increases in the number of students and their mobility have drawn the attention of project developers and investors alike to this market. As a result, student housing was the only property market segment to see consistently rising transaction volumes in Europe in 2022, reaching a new record high of €12.4 billion.”
Co-living, which is tailored towards the needs of young professionals and the growing population of digital nomads applies the community idea to the residential world. For property investors, this evolution holds opportunities for new rental concepts in which properties are operated by an enterprise that offers its tenants fully equipped flats, shared spaces and additional services in urban locations.
“In Europe, about €1.2 billion has been invested in this emerging market segment since 2020,” Bettina Graef-Parker explained, adding: “As the concept is just getting started in many regional markets, we expect dynamic growth, such as we have seen already in the UK and in France.”
Benjamin Walter has extensive experience in commercial property finance and investment, with particular expertise in operational real estate. Most recently, he headed the Investment Management Hospitality International (ex-DACH) team at Union Investment Real Estate. He now returns to Aareal Bank, having worked in various roles in the Bank’s hotel financing team between 2006 and 2019. Michelle Weiss, who has been jointly responsible for student housing and co-living to date, will thus be able to focus on managing the Bank’s hotel financing team. Hotel financings account for 35 percent of Aareal Bank’s loan portfolio.
Aareal Bank has been offering financing for student housing (PBSA) and co-living properties for some time and is one of the leading European lenders in this area.
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