Creating a New Frontier: The Emergence of Purpose-Built Student Accommodation in Poland
Signal Capital Partners, a UK-based private asset management firm, in collaboration with Griffin Capital Partners and Echo Investment, is set to introduce a groundbreaking initiative in the realm of student housing. Pending anti-monopoly clearance, the consortium will unveil a pioneering student housing platform aimed at transforming the landscape of purpose-built student accommodation (PBSA) in Poland.
Over the forthcoming three to five years, the venture plans to establish an operational portfolio comprising 5,000 purpose-built student beds strategically located across key academic cities in the country.
The joint venture structure will predominantly feature a 70% ownership stake held by a partnership between Signal Capital and Griffin Capital Partners, positioning Signal Capital as the primary shareholder. Echo Investment will hold the remaining 30% interest. Griffin Capital Partners will spearhead investment and asset management activities, while Echo Investment will play a pivotal role as the development manager for the venture.
Colman McCarthy, Partner in Real Estate Investments at Signal Capital, expressed confidence in the prospects of the Polish PBSA market, characterizing it as an enticing opportunity for well-capitalized investors to collaborate with seasoned local partners like Griffin Capital Partners and Echo Investment.
McCarthy emphasized the robust growth trajectory of the PBSA sector in Poland, highlighting its impressive income and occupancy performance, which demonstrates minimal correlation with broader macroeconomic fluctuations.
McCarthy elaborated on the allure of the Polish PBSA market, underscoring its status as one of Europe’s largest student markets, boasting over 1.2 million domestic and international students. He noted the particularly rapid growth of the international student cohort, drawn to Poland by the prospect of obtaining globally recognized qualifications at a fraction of the cost compared to their home countries.
However, McCarthy highlighted the inadequacies of existing public university accommodations, citing outdated facilities and limited amenities, which fail to meet the evolving expectations of students.
McCarthy pointed out a glaring disparity in the availability of modern private PBSAs, with bed provisions for full-time students in private and contemporary PBSA accommodations accounting for a mere 1.6%—a figure significantly lower than that observed in Western European cities, which typically range between 5-10%. This shortage of modern, private PBSAs underscores the immense potential for growth within the sector, setting the stage for the rapid expansion of the newly established platform.
In summary, the collaboration between Signal Capital Partners, Griffin Capital Partners, and Echo Investment represents a strategic endeavor to capitalize on the burgeoning demand for purpose-built student accommodation in Poland.
With a focus on delivering high-quality, modern living spaces tailored to meet the evolving needs of students, the joint venture is poised to catalyze significant transformation within the Polish PBSA market, while offering lucrative investment opportunities for stakeholders.
Nebil Senman, the Co-Owner and Managing Partner at Griffin Capital Partners, emphasizes the firm’s robust track record in establishing, developing, and managing market-leading assets in the Private Rented Sector (PRS) and Purpose-Built Student Accommodation (PBSA) markets.
With a portfolio boasting around 10,000 secured and over 4,000 operational units in PRS, including Resi4Rent and Life Spot, as well as significant presence in Polish PBSA, Griffin Capital has demonstrated its prowess in these sectors.
Senman recalls the establishment of Student Depot in 2014, which evolved into a leading player in the market with nearly 4,200 beds operational and 1,000 more under construction. Initially in collaboration with Oaktree Capital Management and later with Kajima Europe until their exit in 2023, Griffin Capital’s journey with Student Depot underscored their belief in the potential of the living sector in Poland. This belief is rooted in the anticipation of stable growth in the Polish living sector for years to come.
Now, Griffin Capital aims to replicate its past success by creating another market-leading platform in Poland, leveraging its partnership with Signal Capital. Senman expresses confidence in Signal Capital’s alignment with their vision to seize the untapped potential of the PBSA market swiftly and consistently.
Furthermore, their collaboration with Echo Investment, regarded as Poland’s premier developer, ensures the delivery of top-tier, sustainable premises in vibrant urban centers, equipped with comprehensive services tailored to students’ needs.
Despite its potential, PBSA in Poland remains an emerging institutional asset class and has progressed at a slower pace compared to other European countries. Presently, only 12,700 beds are operated by nine major providers, highlighting a significant shortage of student accommodations. This scarcity is exacerbated by the growing internationalization of Polish universities, further accentuating the need for quality student housing.
In essence, Griffin Capital’s strategic initiatives underscore its commitment to addressing the pressing demand for PBSA in Poland. Through leveraging expertise, partnerships, and a deep understanding of market dynamics, Griffin Capital aims to not only fill the existing gap but also set new standards for student accommodation, contributing to the growth and development of Poland’s PBSA sector.
Nicklas Lindberg, CEO of Echo Investment, heralds a new era for the company’s ventures in the living sector. With the recent acquisition of Archicom, Echo Investment solidifies its position as one of Poland’s foremost residential developers. Lindberg proudly declares, “Our expansion into the Resi4Sale segment has been a significant milestone, propelling us into a leading position in the market.”
But the company’s ambitions don’t stop there. In Resi4Rent, where Echo Investment holds a 30% stake alongside Pimco and Griffin Capital Partners, they’re also making waves as market leaders in the PRS (Private Rented Sector) segment. Now, they’re poised to enter yet another arena: student housing.
Lindberg announces with enthusiasm, “As of Q3 2023, we have set our sights on the student housing segment. Our goal is to not only participate as co-investors but also to take on the role of developers, aiming to establish a dominant and sustainable presence in this market.”
Echo Investment’s foray into student housing leverages their expertise honed through the Resi4Rent platform. As the development manager, they bring invaluable construction and development capabilities to the table, ensuring the creation of comfortable living spaces that meet the demands of today’s students. Lindberg reveals their ambitious plan to develop a minimum of 5,000 student beds over the next 3 to 5 years.
The initial phase will see projects launched in Warsaw and Krakow, with doors set to open in September 2025. However, their vision extends beyond these cities; they’re eyeing opportunities in key academic centers like Wrocław, Tri-City, and Poznań.
Echo Investment’s selection criteria for these projects are stringent. They prioritize locations that offer accessibility, top-notch quality, and sustainability, all within close proximity to universities. Lindberg emphasizes, “We’re committed to creating living spaces that enhance the student experience while aligning with our sustainability goals.”
The fruition of these plans hinges upon regulatory approval from antitrust authorities. Legal experts from Linklaters, TSP Law, MDDP, and CBRE have guided the parties involved, ensuring compliance and smooth navigation through the regulatory landscape. Echo Investment has been equally diligent, enlisting the support of Greenberg Traurig and EY to safeguard their interests throughout the process.
In summary, Echo Investment’s strategic expansion into the student housing sector marks yet another milestone in their journey. With a firm commitment to excellence, sustainability, and innovation, they’re poised to reshape the landscape of student accommodation in Poland, setting new standards for quality living experiences.
