Echo Investment, a subsidiary of WING, set to commence the construction of student housing in Poland
2024-03-08
Over the next three to five years, WING’s top Polish real estate developer subsidiary, Echo Investment is planning to commence the development of modern, energy-efficient accommodation units specifically designed to house 5000 students in the university cities of Poland. For this purpose, it is establishing a joint subsidiary with Signal Capital Partners, a London-based asset management firm focusing on corporate and real estate investments, as well as Griffin Capital Partners, the leading investment and asset manager in Central Eastern Europe. These two companies are the majority shareholders of the joint venture with a 70 percent share, while the remaining 30 percent is owned by Echo Investment, which will also be involved in the partnership as a real estate developer.
High demand in the market for Polish student accommodation
Student housing is one of the fastest growing asset classes on the Polish real estate market, presenting compelling business opportunities even for the biggest investors, thanks to the steadily increasing market demand. Poland has one of the largest student housing construction markets in Europe, driven by over 1.2 million students, including over 100 thousand international university students. The number of international students in the country shows dynamic growth, yet the existing state-funded university housing solutions often fall short of student expectations, as the buildings are often outdated and have limited amenities. The growing number of English-language programmes, quality education services and favourable tuition fees are the drivers of the increased demand. Poland currently has only nearly 12,700 student beds operated by 9 service providers, as a result of which there is a great shortage of modern, private student dormitories. The ratio of available student accommodation to beds is only one-fifth to one-tenth of the rates in Western European cities, which has become a major obstacle to the development of universities in the country.
The construction of modern housing for five thousand students set to commence
The strong demand provided ideal conditions for this type of real estate investment, which is one of the reasons why Echo Investment chose to establish a joint subsidiary with Signal Capital Partners and Griffin Capital Partners, the strategic partner of WING. The approval of the Polish competition authority is also required to finalise the agreement between the parties. The founders of the joint venture have set out to achieve a leading role in the market. Apart from their proximity to the universities, outstanding quality, accessibility and sustainability will be top priorities throughout the developments.
“As WING’s subsidiary, Echo Investment continues to expand its residential real estate development activities. The company is one of the biggest operators on the Polish market, in both the residential property sale (Resi4Sale) and rental (Resi4Rent) segments. As a co-investor and developer, we now wish to enter the student housing segment, which is in high demand on the market. This sets the conditions for the rapid growth of the new line of business. Our goal is to provide a large number of modern and sustainable housing solutions for students in Polish university cities, based on our experience in the field of residential real estate development. The initial developments are set to commence in Warsaw and Krakow and are scheduled to be completed by September 2025. At the same time, we have also started exploring the possibilities for further potential construction sites in Wroclaw, Tri-City and Poznan. This move will further consolidate the group’s presence on the real estate market in the region and bring us closer to our goal of becoming Europe’s leading real estate firm,” said Noah Steinberg, Chairman & CEO of WING Zrt.
Professional investors to spearhead the renewal of the Polish student housing market
In 2019, Budapest-based WING, one of the leading real estate and investment groups in Central Europe, decided to commence its international expansion based on its success in the Hungarian real estate market. After surveying the regional markets, the Polish real estate market proved to be the most lucrative investment location based on the opportunities for real estate development and investor market characteristics. This was followed by the acquisition of a majority ownership of Echo Investment, the largest Polish real estate development company, the only firm with a combined presence in the residential, retail and office markets.
Its partners include Signal Capital Partners, a London-based asset management firm with a multi billion euro annual turnover, focusing on European corporate and real estate investments, unique market segments and business opportunities.
Griffin Capital Partners, on the other hand, is one of the largest private investment and asset management companies on the Central Eastern European private equity and real estate market, and also the most active investor in the region. Based on its professional experience and references, the firm offers a one-stop-shop solution for international operators seeking to invest in Central Eastern European and other, selected Western European markets.
