- Poland, Czech Republic, Slovakia and the Baltic States to gain student accommodations after EIF throws its weight behind fund run by 1 Asset Management.
- EIF commitment of €50 million paves way for housing for up to 3500 students.
- Pledge, supported by InvestEU programme, marks first EIF-backed fund focused solely on social infrastructure in Central and Eastern Europe.
Student housing in central and eastern Europe is set to expand following a €50 million commitment by the European Investment Fund (EIF) to an initiative run by Lithuanian investment company 1 Asset Management. The EIF contribution, backed by the InvestEU programme, supports the Central and Eastern Europe Student Housing Fund and brings total pledges, adding further investors into the fund, to €112 million. It makes the CEE Student Housing Fund the first in the EIF portfolio that is focused exclusively on social infrastructure in Central and Eastern Europe.
CEE Student Housing Fund will have capacity to finance the construction of housing for up to 3,500 students in Poland, the Czech Republic, Slovakia, Lithuania, Latvia and Estonia. The project scope includes the construction of at least seven buildings in major academic cities over the next five years.
The investments will start immediately as CEE Student Housing Fund has already secured the pipeline, begun financing and the construction of student housing projects to accommodate 1,800 students in the Polish cities of Warsaw, Wrocław and Gdańsk. Four buildings – two in Warsaw, one in Wrocław and one in Gdańsk – are due to be constructed during 2025-2027.
“We are excited to partner with 1 Asset Management to support the development of modern student housing in a region with significant needs in this field,” said EIF Chief Executive Marjut Falkstedt at a signature event today in Vilnius. ”We are glad to be making our contribution in support of European students.”
“Having an institutional investor like the EIF adds credibility to our investment strategy for student housing projects,” said Chief Executive Officer Alius Jakubėlis at 1 Asset Management. “This is a confident step forward. With growing demand, strong occupancy rates and increasing rent levels, the student-housing sector serves as a potential hedge for investors during the current economic situation.”
The CEE Student Housing Fund already financed student housing projects for a total of more than 1,500 students in the Lithuanian cities of Vilnius and Kaunas, Latvia’s capital Riga and the Polish city Krakow.
Matas Mockeliūnas, a Fund Partner said the current priority is to expand such projects in Poland because its student population totals 1.2 million and needs here are the greatest. “Our focus remains in Poland while central and eastern Europe in general is on our radar. I am excited about the EIF joining this venture and looking forward to transforming the regional student housing infrastructure and addressing the pressing need for modern living spaces for students as well as young professionals, most public dormitories are outdated and fall short of required living standards, the demand in the region is high and supply is still low.”
Background information
About 1 Asset Management: the investment management company 1 Asset Management manages AUM of over €280 million across several investment strategies: forestland fund, student housing fund, airport hotels fund, private debt and private equity funds. Regarding student housing the company’s target is to create a portfolio of well operating assets in major CEE academic cities and increase the number of accommodation units in operation up to 5000 within the next five years. Current student housing portfolio includes developments in Vilnius and Kaunas (Lithuania), Riga (Latvia), Krakow (Poland), two developments in Warsaw (to be opened in 2025), Wroclaw (to be opened in 2026), Gdansk (to be opened in 2027).
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s small and medium-sized enterprises (SMEs) by helping them access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments that target this market segment. In this role, the EIF advances key EU policy objectives including competitiveness, growth, human capital and climate action.
The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery and growth. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.
Quote:
I welcome this InvestEU-backed EIF investment that will have a tangible impact on social infrastructure, providing accommodation for students and responding to the pressing demand for modern living spaces in major academic cities of Central and Eastern Europe. Investing in youth has a multiplier effect in our economy, driving long-term social and economic growth, as well as quality in job creation.
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People
Source – EU Commission