At CEDER 2024, during the panel for Primary and Secondary Investment Markets, Doron Klein, Deputy CEO of AFI Europe & CEO of AFI Europe Czech Republic & Romania, spoke about their new developments in the segment of residential for rent. “Definitely, from a residential for rent point of view, we see a great opportunity and great potential. (…) In Romania we are actually at the beginning of this segment, and I’m happy that we are taking a certain leading, pioneering position in this segment, (…) AFI Home North being one of the first institutional resi for rent projects in the country.”
To emphasize his confidence in this segment, Klein said that in Poland, AFI already owns more than 3000 residential units either built by AFI or forward funded, in Romania, they have 400 units, and in the Czech Republic, they have 1000 already operating units and 1500 more to come in the following years. He explained: “Our expectations from the resi for rent market are quite substantial. We see a significant rent growth. (…) Living is becoming more expensive, it will be more expensive probably to buy a residential apartment. We saw these trends in the last 15 years in Prague and in Poland, and the market is being somehow pushed towards this resi for rent.”
João Saracho de Almeida, Managing Director of Solida Capital Europe spoke about yet another segment of residential: student housing. “We like a more niche market, which is the student housing for living (…) which means we target, and we develop these properties suited for students and young professionals. (…) We like that niche for, I would say it’s a good efficiency you can extract from those properties in terms of average rent that you can get for square meter.”
He said his company has 1200 units under construction in Warsaw and a pipeline for a new platform of around 6000 units and that it is crucial for this type of property to be “time-proof” and have all the best amenities. “All this builds a community, and what we see (…) from our experiences on developing such properties [is] that when you manage successfully to build a community, this magnetic effect comes into force and will give a long life to your asset.” When asked why he chose to invest in student housing instead of properties with better yields, he said: “What you need to look [at] is not really the yield, if it’s 5% or 4% or 8%. But what is the compression from your yield to cost to your exit yield. Are you going to make more money on offices or are you going to make more money on rented living?”
