Educational Real Estate in Germany

At the end of the summer holidays in Hesse, I had the opportunity to get a personal impression of ISG Süd in Frankfurt. The school recently made headlines nationwide. The building is so badly neglected that there is a risk of collapse. Teachers and students had to move to other school buildings in the city at short notice during the summer holidays.

The incident highlights the enormous investment needed in schools. Municipal budgets have been stretched to their limits for years. ISG Süd is a prime example of the investment backlog in schools in Germany. According to current estimates, this now amounts to almost €55 billion.

From my conversations with investors, I know that there is interest in educational real estate. Long-term leases with the public sector ensure stable rental income. The demand for school places is high. ESG criteria are met. The asset class has potential.

However, access to educational real estate is limited for investors. Schools owned by the private sector are considered a sensitive issue. No politician wants to make a mistake in this area. Political reluctance often prevents solutions from being found.

A rethink is needed here. Good schools are an essential location factor. The targeted use of private capital could strengthen the state infrastructure. Conditions such as those at ISG Süd should not become the norm in Germany.

Ronny Kazyska