Spain has witnessed a steep increase in university students, resulting in rapid growth for the student housing sector. The internationalisation of Spain’s education system has grown massively over recent years, driving more and more students to the country, all looking for quality accommodation.
But why Spain?
- The quality of education available is exceptional; 24 Spanish universities are listed, for specific disciplines, in the top 200 universities worldwide in three of the most used international rankings – 17 of which in the top 100 and 8 in the top 50.
- The standard and style of living, beautiful scenery and world-renowned fiestas – a real pull for the student demographic.
- Increased demand for higher education and an estimated 11% increase in the population of 18-24 year-olds between 2018 and 2025.
- The Spanish language is the second most spoken language in the world, topped only by Chinese and closely followed by English – a key driver and asset for the country, making it appealing to a vast pool of students.
The Spanish market has a shortage of student property and with demand only increasing, developers, operators and investors all have a massive opportunity to capitalise on this. In addition to students wanting quality accommodation, the expectations of the building’s facilities are increasing. The concept of co-living, where students can live, work and socialise all under one roof, is becoming increasingly more popular.
With the market’s buoyancy, purpose-built developments located within close proximity to campus are becoming a fantastic alternative asset class for investors to acquire – especially those with an advanced offering.
CBRE’s Investor Intentions Survey showed student housing registered a year on year increase in investor interest, resulting in a fast growing, purpose-built student housing sector.
Over recent years several large acquisitions have been completed including:
- Greystar and AXA Investment Management’s joint venture in 2017, acquiring 27 properties from Spain’s leading student accommodation provider Resa for €400m.
- Corestate Capital Holding acquired a plot in Seville on the Eusa campus with plans to develop a new student residence providing 413 beds. The development will provide a kitchen, gym, games area, study rooms, swimming facilities, and more.
- Corestate also announced in December last year their plans to invest a further €100m in student residencies in Spain as they continue their growth plans.
- Temprano Capital Partners in collaboration with CPA®:18 – Global, acquired a new site in Valencia in September last year. The new, high-end student residence will have the capacity for 290 students in the 10,000 sqm building. Valencia has more than 100,000 students and this accommodation will offer great access to universities by tram and cycle paths.
- The British company, Amro Real Estate, acquired a student residence building in Seville, situated between three university campuses earlier this year. The business plans to refurbish the building to create areas for studying, socialising, dining, parking and a gym. Upon completion (expected in 2021) the development will accommodate 332 students.
- In 2017, GSA entered the Spanish market as they continue to expand their footprint. The initial investment comprised of four Madrid-based accommodation developments with two more Barcelona-based operations coming this year!
The Spanish student accommodation market is thriving. There is an abundance of activity and highly profitable opportunities available, making it a hugely lucrative market to be active within.