24 September 2015 – El Confidencial
The real estate product that has received the most interest from investors over the last year has not been offices, or shopping centres or houses, but rather halls of residence. And although they have passed virtually unnoticed as an asset in their own right, they starred in some of the most important investment transactions during the first half of 2015. To give you an idea, three of the ten largest operations closed in Europe during this period involved portfolios containing student halls. (…).
Moreover, in 2015, around €1,500 million was spent on a single student hall portfolio in the UK – that amount is equivalent to the market capitalisation of Spain’s largest Socimi, Merlin Properties, when it first listed last year. And it is just €300 million less than the amount that same Socimi will pay to acquire the real estate company Testa from Sacyr.
In Spain, where there are almost 1.4 million university students, the launch of this sector looks set to be just around the corner. At least that is the conclusion of analysis prepared by CBRE, which notes that this investor appetite will end up arriving in our country sooner rather than later because, although Spain is not yet such a mature market as the UK or Germany, real estate transactions involving halls of residence are becoming increasingly attractive. According to CBRE’s calculations, Spain has a stock of around 94,000 keys, of which approximately 52,000 are located in the 5 main university cities: Madrid, Barcelona, Salamanca, Valencia and Sevilla. (…)
What is the product like in Spain? Only 20% of the halls of residence in Spain are owned privately, and operated by their owners, whilst the remaining 80% are properties that are publicly owned or belong to the universities, or religious institutions, which are managed under concession agreements. Although the transactions that have closed in Spain have not been talked about as much as those in the rest of Europe, several operations have been signed. The largest one to take place during the first 6 months of the year was The Student Hotel’s (TSH) acquisition of a portfolio containing two halls of residences in the Melon District of Barcelona (Poble-Sec and Marina). The TSH platform was acquired by the US fund manager Perella at the end of 2014.
These two halls of residence, which previously belonged to BBVA, comprise 597 keys and 152 parking spaces, as well as around 3,465 m2 of restaurant and retail space across the two buildings.
In addition, in Madrid, two important concessions agreements, both in the Ciudad Universitaria neighbourhood, have changed hands. Also in the capital, construction has begun of the future Residencia El Faro, a 370-key project that will be operated by The Student Hotel and is located at number 2, Calle Isaac Peral, opposite the Hospital Universitario Fundación Jiménez Díaz. The same operator will also manager an even larger project, comprising 570 keys, currently under development in Barcelona. Both developments will require a total investment of €52 million.
CBRE predicts that several transactions could be closed over the next few months, given the high level of interest from international investors and managers looking to expand their businesses in Spain, a country that is home to 4 of the 10 cities that are most sought after by European students wishing to participate in the Erasmus program.
The UK market is the most active in Europe
Purchasers of these products have undoubtedly been most active beyond our borders. In England for example, transactions worth €2,950 million were recorded in 2014, and that figure almost doubled during the first half of 2015, with transactions amounting to €5,650 million. (…).
The German and Dutch markets, which have stocks of 234,000 keys and 400,000 keys, respectively, are also developing fast. (…).
Original story: El Confidencial (by Elena Sanz)
Translation: Carmel Drake