Develia entered into a joint venture agreement with CEE Student Housing Fund, managed by investment management firm I Asset Management and backed by Hanner, concerning a student residence project with over 300 accommodation units in Wrocław.
Develia and CEE Student Housing Fund, managed by I Asset Management and backed by Hanner, have entered a joint venture to develop a student residence project in Wrocław with over 300 accommodation units. As the developer, Develia is responsible for land acquisition, construction supervision and fit-out. Upon completion of construction, Develia’s shares in the project will be acquired by the partner, who will handle the commercialization and management of the facility.
“Together with I Asset Management and Hanner we will develop a real estate project in the co-living sector, in line with one of the goals outlined in our strategy, concerning residential projects for institutional clients. At the same time, the joint venture agreement brings us closer to achieving one of Develia’s goals for this year. The project is a form of diversification and complementation of our core activity in the residential housing sector. The collaboration model established with our partner involves engaging Develia’s capital at the level of 10 percent and receiving compensation for project execution. We expect a significantly higher return on investment than the 15 percent outlined in our strategy,” says Andrzej Oślizło, CEO of Develia. “As the developer, we are responsible, among other deliverables, for land acquisition. We have already signed a corresponding agreement to secure the land property on which the facility will be constructed,” adds Andrzej Oślizło.
Develia plans to start the construction of the building in the turn of 2024 and 2025, after receiving the building permit. According to the preliminary schedule, it shall be commissioned at the beginning of the academic year 2026.
“Wroclaw development is already our third purpose-built student accommodation project in Poland. We opened the SHED Living Kraków project, comprising 566 units, in Kraków in September last year and are now developing a 360-unit property in Warsaw. As the demand for this type of accommodation is high, we see huge potential in Poland and are actively expanding our portfolio and looking for new opportunities in Warsaw, Gdańsk, and other academic cities in Poland and neighbouring countries. Strong results in already operating projects in Lithuania, Latvia and Kraków serve as a track record and give confidence to our partners and investors,” says Matas Mockeliūnas, Fund Partner from I Asset Management.
The capital involvement of the CEE Student Housing Fund in the project was set at 90 percent, with Develia’s contribution at the level of 10 percent. Before finalizing the transaction, the companies had obtained approval of the joint venture from the President of the Office of Competition and Consumer Protection (UOKiK). The CEE Student Housing Fund, managed by I Asset Management is strongly backed by Hanner, a leading real estate and investment company in the Baltic states.
“Hanner Group’s primary investment strategy is real estate investments and we continue shifting our capital allocations towards the CEE market. We see good prospects for investing in modern private student housing projects in Poland because of strong market fundamentals. The partnership with Develia and I Asset Management is a great opportunity for us to enter the promising and very interesting Wrocław student housing market,” says Arvydas Avulis, Chairman of the Board of Hanner.