Thinking out of the dorm

Rafał Ostrowski, ‘Eurobuild CEE’: You have developed communities for almost 40,000 students to date in North and South America. Why are you starting your European expansion in Poland?

Matt Walker, senior vice-president of international operations, CA Management Services: CA Ventures started developing buildings like the one in Kraków about 15 years ago. When you go to any major university town in the US you can see buildings that look and function like this with amazing facilities for students. So in the last few years CA has decided to take that vision and its experience to South America and to countries such as Poland and cities like Kraków, as well as to other parts of Europe that we believe are under-served and need buildings like this for the students.

So what’s your plan for Europe?

Nick Hill, senior vice-president of new development operations, CA Management Services: We plan to be very active across the UK and pan-Europe. We are looking at the top tier universities that need more high quality student housing to meeting growing enrolment. I wouldn’t be surprised if we open around eight to ten buildings per year across Europe based on the current supply and demand dynamics. Furthermore, we plan to exceed the status quo in terms of the quality of our product and service delivered to residents.

How long will you be able to keep up such a pace?

NH: In the US we’ve been having great success year on year. We develop a building, we see how well the students like it, we make changes, we get real time feedback – “oh, we want more study space and more gym space” – and then we add that to our next round of buildings. And in doing this we have been very successful. In fact, the lessons learned to date are what inspired us to design all the amenities you can see here in our Kraków hall. Ultimately, as long as student enrolment keeps on growing across the world as well as the need for high quality accommodation near campuses, we will strive to provide it.

MW: And because eight to ten buildings is something that we’ve already done in the US, it’s not a wildly optimistic goal or an unrealistic number. Having actually done that in the US, we know we can scale to that number.

Where will you be expanding to in the rest of Europe?

MW: There are opportunities in almost every market, so I will put it this way: the UK is the most mature student housing market in all of Europe. There are several other companies there that do student housing like we do, but even in the UK alone we should be opening 8 to 10 buildings by 2021. Now, moving on to 2022 and 2023, we will be expanding into Italy, Spain, Portugal, doing more in Poland and, most likely, we’ll be active in the Netherlands. Our pipeline just continues to grow and grow.

What projects are you are currently working on?

NH: LivinnX Kraków is our very first European asset. In the UK we are looking at Edinburgh, Glasgow, Sheffield and other top tier university cities where the supply isn’t meeting the demand. We have a robust European pipeline from 2021 and beyond that includes both purpose-built student accommodation and build-to-rent schemes.

Talking about the financial side, it requires a lot of funds to expand like that across Europe. How are you financing this expansion?

NH: When we have eight to ten projects per year – and that does require significant partnerships. So we are out there speaking to groups right now. A big part of the reason why I moved over here was to meet these various equity groups and explain how we are going to be better and different.

Are the buildings you develop for sale or will you be holding onto them?

MW: As individual apartments or individual space, no. These buildings are the whole thing or nothing; but typically, yes, they are real estate investment, so eventually they will be sold. Nick and I work for a management company, so in many cases the owner might change or a different partnership gets created in the ownership structure – but the management team remains in place. That happens quite frequently in the US and even in the UK with its developed student housing market. So it’s quite possible and in fact pretty common for the ownership structure to change. And the residents of the buildings don’t even know the difference.

Would you consider buying a ready-made student hall?

MW: I would say this has to be driven by the location and the opportunity. We can consider both. At core, however, we are a developer and an investor – but with a focus on development. So although our company has engaged in acquisitions at times, this is not our priority.

LivinnX Kraków’s amenities include a sauna, a rooftop jacuzzi, a fitness room, game and TV rooms, and a climbing wall. Which of these amenities are the most important for a student hall?

MW: Wifi is one of the most important things to have and our intention is that it should be included without any extra costs. Internet and cable are available throughout the building, so students don’t have to worry about signing a contract or about any of the services. They are included in the price and there is always on-site management in the building and somebody to help you 24/7, including overnight in an emergency. Those are, I think, the big differentiators between apartments and our student housing.

NH: We wanted it to look and feel like a nice hotel. You walk in, all your furniture is there. You’ve got a gym. We’ve included state-of-the-art security technology, such as electronic locks, CCTV throughout, etc., coupled with a 24/7 staff presence to respond to any needs. It’s got everything our residents need and at the end of the day this means peace of mind for parents as well as for the students.

Another unusual feature is the jacuzzi on the roof. Where did the idea for that come from?

MW: Well, we commissioned a research company to go out and see what students here actually want. And they not only want a place to live but common areas to meet people, to relax, to study to be able to maintain a balance between studying and social life. So when we are developing a building, especially such a massive one with a lot of common space, we have to think about what can we do. Thus we can provide a gym and we can have a beautiful roof terrace with views onto the city’s Old Town, and we can put a jacuzzi on it and grills… it’s all about that balance between studying and socialising.

NH: This is an idea that is becoming increasingly important to students – and not just here in Poland. It really is a worldwide change. Students don’t just go to university. They have always had a social life somewhere and we believe that it’s a better option for students to have that balance between study and leisure in a single and secure space, where they can meet people and relax and have some down time and study time. And to have a home in the same immediate community.

What lies in the future for student housing? What amenities will appear in future student communities?

MW: I think there will be more higher quality options being offered. There will be different locations – maybe closer to universities, maybe more in city centres, in smaller boutique buildings. So there will be different varieties of student residence, but the same DNA of high service and high product standard.

NH: And if you want to know what specific amenities they will have, we are constantly trying to refine that based on feedback from our residents. A few years ago cinema rooms were very popular in student buildings, but since then they’ve kind of disappeared in some markets. So I think a big trend that is here to stay is that single-use space will continue to diminish in importance. By this I mean that residents prefer flexible space that can suit several needs. This could be a lounge area that is designed for eating a meal with friends or studying with a classmate or reading alone. It could also be flexible fitness space that allows everything from yoga or barre to virtual on-demand fitness classes. Ultimately, the demand is always evolving, and so we focus heavily on staying in tune with how to best serve our residents in each community.


LivinnX Kraków (bottom) is CA’s first European student hall

Living like a student

Nick Hill serves as the senior vice-president of new development operations for CA Management Services, and is based in London. He heads the student living and multifamily teams throughout the UK and Europe. In the ten years prior to relocating to London, he worked in a similar position based in Chicago, where he and his team were responsible for 30,000 beds. Nick graduated with a BSc in finance from the University of Illinois and is currently completing an MBA through the same university.

Matt Walker serves as senior vice-president of international operations for CA Management Services, and is based in Bogotá. Matt oversees all property leasing and operations for all properties outside the US, and provides operational guidance and insight for potential investments in non-US markets. His is also responsible for integrating US-based and foreign-based accounting, asset management, and investment teams. Prior to relocating to Colombia in 2018, Matt served as the vice-president of operations for CA Management Services’ domestic student housing portfolio, overseeing all 30 assets across the US. He received his BA in political science from the University of Oklahoma and his MBA focused on real estate from Texas Christian University.