GSA Completes the Purchase of a New Hall of Residence in Madrid

Global Student Accommodation (GSA) has reached an agreement with Corestate to purchase the Emilia Pardo Bazán student residence in Madrid, which has more than 300 rooms.

Global Student Accommodation (GSA) has closed the purchase of a student residence in Madrid. Specifically, GSA has acquired the Emilia Pardo Bazán complex, located in the Ciudad Universitaria area. The property has 302 rooms, both doubles and singles, for students.

The hall of residence, which opened in 2008, was owned by the German firm Corestate Capital Advisors.

Harrison Street Joins Forces with Nexo & Injects €200m

8 April 2019 – Cinco Días

The US fund Harrison Street has just injected almost €200 million into a company owned by Nexo Residencias, with the aim of launching a growth plan. To date, the company was owned in its entirety by GSA (Global Student Accommodation), a group operated from the UK and backed by capital from Dubai. GSA purchased acquired Nexo from the fund Oaktree in 2017 for €140 million.

But now, Harrison Street has become the majority stakeholder of Nexo under a co-investment formula, which the Dubai group uses in the different markets in which it operates. Harrison Street is already the firm’s partner in several other countries and so the partnership in Spain is merely an extension of its successful relationship.

Nexo is currently undergoing a major expansion process. It is building two halls of residence in Barcelona and one in Valencia. GSA’s objective is to grow its existing portfolio of 1,500 beds to between 10,000 and 14,000 in time.

Harrison Street is a real estate fund manager based in Chicago, which has assets under management amounting to around USD 18 billion (€16 billion).

Original story: Cinco Días (by Alfonso Simón and Pablo M. Simón)

Translation/Summary: Carmel Drake

Invesco, GSA, Amro & Bankinter are Committed to the Student Hall Sector

6 April 2019 – Expansión

Halls of residence for students have become one of the most sought after assets in the real estate sector in recent years. The demand for beds (which far outstrips supply), the growth forecasts for the market and the lack of suitable supply for the new requirements of the market has led operators and investors to get involved in the promotion and development of new halls of residence.

Four of the largest investors are planning to spend €1.5 billion in the sector over the next few years, as follows:

GSA, which arrived in Spain in 2017, with the purchase of 3 halls of residence from Oaktree, wants to invest €500 million in Spain and Portugal to grow a portfolio of 15,000 beds. It already has four centres in operation and plans to open two more in Barcelona soon.

Meanwhile, Invesco has teamed up with Syllabus, the subsidiary of Urbania, to invest €250 million in new halls of residence with the aim of adding 2,000 beds in Spain and Portugal; and that figure could rise to 3,500.

In addition, the British firm Amro Real Estate is looking to invest €300 million in 5,000 new beds across Spain and Portugal and has just closed its first investment in Granada, where it will build a hall of residence with 360 beds.

Finally, Bankinter has launched a private equity fund to invest between €300 million and €400 million in the construction of student halls across Iberia; its first project will also be in Granada.

The future is bright for the growth of this segment.

Original story: Expansión (by Rebeca Arroyo)

Translation/Summary: Carmel Drake

C&W: Investors Spent €300M on Student Halls in Spain in 2018

25 March 2019 – Eje Prime

Investors galore have set their sights on the market for student halls in Spain. Three major institutional investors, Axa, Invesco and Nuveen, have launched themselves into the construction and management of these types of properties, which they consider are reliable bets that generate high returns.

According to Cushman & Wakefield, investment in student halls in Spain amounted to almost €300 million in 2018. And the consultancy firm expects that figure to be exceeded in 2019.

Spain currently has 1.6 million students, of whom around 15% are potential users of student halls. Nevertheless, the accommodation stock comprises just 95,000 beds, which represents 6% of all matriculated students. As such, there is a lot of potential in the market.

In summary, demand is growing, supply is limited and returns are high, currently averaging 5.25% in Spain. As such, the market has captured the attention of global investors.

Indeed, investors in Spain generally fall into one of two categories: institutional investors with an international profile, such as the three players mentioned above; and European investors specialising in student halls, particularly those from the North of Europe, such as the British firms GSA and Collegiate, the Dutch firm The Student Hotel and the German company Corestate.

Meanwhile, the consultancy firm Savills Aguirre Newman calculates that around twenty major operations could be closed in this segment in 2019, which could result in investment of more than €2 billion over the next few years.

Original story: Eje Prime (by Roger Arnau)

Translation/Summary: Carmel Drake

From Greystar to GSA, a Who’s Who of Investors in Spain’s Market for Student Residences

27 August 2018

With returns of 5.5%, the student housing market has become the new El Dorado of the real estate market. A long list of foreign funds are beginning to invest in this sector in Spain, and the supply of accommodations is expected to rise by almost 10% up to 2019.

Anglo-Saxon funds and operators dominate the wave of foreign capital that is taking on the market for student residences, one that offers returns of 5.5% in Spain. Just in 2017, investments grew from 50 million to 600 million euros.

The supply of assets in this alternative market has increased by 3.5% since 2015, boasting 93,563 beds in the market at the close of last year. Forecasts expect the sector to grow by another 1.5% this year and up to 7.7% at the end of 2019, according to data from the consultancy JLL. Which are the funds that dominate the sector? And who set to join this latest rush for gold?

The high point of the new wave of international investment in Spain’s resis (student residences) was reached at the end of 2017. Until December, Resa was considered the king of the residential market for university students in the country. It was owned by for years by the firm Lazora (Azora) until the arrival of the joint venture formed by AXA Real Assets and CBRE Global Investment Partners funds, which made an offer for roughly 500 million euros. Subsequently, the company’s 37 assets, distributed among 33 buildings and four undeveloped plots of land, were taken over by the specialised operator Greystar, partner of AXA Real Assets and CBRE GI.

Greystar’s place at the top of the list remains firm, but a long list of other players are vying to take the top spot. The British operators GSA and Collegiate, and the Luxembourg fund manager Corestate all have ambitious plans for growth in Spain.

GSA will invest 300 million euros in new acquisitions in the Spanish market, as reported by EjePrime. The international student-accommodation giant expects to be managing 10,000 beds in Spain within five years’ time. For now, the company has two projects underway in Barcelona, ​​in a total investment of thirty million euros, and is already working on plans to enter the market in Madrid, as well as exploring other cities such as Salamanca along with regional capitals in the south and north of the country.

For its part, Collegiate allied itself with the Spanish group Early Capital at the beginning of the year to enter Barcelona. The operator will manage the student residences at the Finestrelles complex, in Esplugues de Llobregat, acquired by Early last autumn, its third asset after the ones it already owns in Madrid and Valencia. Now, the company is looking for opportunities in Bilbao, Malaga and Granada.

Corestate also flew in from Luxembourg. Like the more than 473,000 university students who arrive every year in the country, searching for accommodation, the fund is looking to enrol in the sector. After beginning work on its first two projects, in Madrid (inauguration in September) and Seville, it is now finalising the purchase of a plot of land on which it is to develop another 400 beds. The manager’s goal is to become one of the top three players in the sector by 2020, with more than a thousand beds spread across the country. The company is already analysing the acquisition of another half a dozen plots of land to attain the goal it set for itself.

The Student Hotel is another of the major European players that have begun to take a close look at Spain. The Dutch operator has announced plans to invest 240 million euros in Spain and has already acquired two assets in Barcelona and will debut its first project in Madrid in 2019.

The Spanish ‘resi’ listed on the MAB

Although much of the capital that is being allocated to the student residence market in Spain comes from abroad, the local players are also looking for their piece of the pie. The Lofttown and Syllabus, a specialised vehicle created by Urbania International, are two clear examples of emerging, local interest in the sector.

Lofttown started its journey in the picturesque neighbourhood of Gràcia in Barcelona. Presided over by Santiago de Cruilles, the company already has two more projects in the Catalan capital in which it invested 24 million euros, EjePrime reported. The company is also analysing a possible debut in other cities around the country, such as Madrid, Girona and Valencia.

For its part, Syllabus is already currently one of the most active investors in the student residence market. Created last April by Urbania, the vehicle expects to invest up to 200 million euros in the development of new student residences in Spain. The company hired the former CEO of Hill International, Jeffrey Sújar, and has already made its first acquisitions, in Valencia and Malaga.

In addition, the university market in Spain is undergoing such a boom that a company that focuses on the market is also listed on the local stock exchange. Student Properties debuted on the Mercado Alternativo Bursátil (MAB) last December. Currently, the company owns a single asset, located in the district of Salamanca in Madrid.

Other possible arrivals

During this year and, above all, the one that is coming, new players are expected to enter the market for university residences. On such arrival is the American giant CA Ventures, which has Spain squarely in its sights within a 500-million-euro European investment plan.

Other institutional investors that are interested in the market include the Belgian group Life, the American investment fund Round Hill and the British operator Amro. The latter is looking for a partner in the national market to invest up to €300 million to create a portfolio of 5,000 beds in southern Europe.

Original Story: EjePrime – Jabier Izquierdo

Translation: Richard Turner

 

Corestate Finalises More Land Purchases in Spain

25 June 2018 – Eje Prime

Corestate wants its share of the student resident cake in Spain. The Luxembourg-based fund manager is finalising the purchase of new plots of land in the country, at the same time as it is starting to search for new opportunities in Portugal, according to explanations provided by the company’s most senior executive in Spain, Christopher Hütwohl. Corestate’s objective is to be ranked as one of the Top 3 operators in the sector by 2020.

The group is whereby seeking to fight off competition from companies such as Greystar, currently number one in the sector by number of beds following its acquisition together with Axa Real Assets and CBRE Global Investment Partners of Resa’s portfolio (formed by 37 assets) for €500 million. Another prominent operator is GSA, which acquired RIO’s portfolio for €180 million.

Corestate, which managed assets worth €22 billion at the end of the first quarter, is now launching new land acquisitions to build halls of residence for students, which will be added to the 206 beds that it is going to open in the Madrilenian district of Moncloa in September and the more than 300 that it will incorporate in Sevilla following the purchase of a plot of land in May.

According to Hütwohl, the company is currently finalising the acquisition of another plot on which it will build 400 beds and is “analysing four more plots” for 700 beds. Thus, Corestate’s plans include closing 2018 with more than 200 beds in Madrid and reaching 1,000 beds by 2020, which, according to Hütwohl “would place us as one off the Top three players in Spain”.

In parallel, the company has started to analyse its entry into Portugal with its business model. According to the head of Corestate, the fund is looking for opportunities in cities such as Lisbon, Porto and Aveiro.

The company is looking for plots on which to build with sizes that depend on the sizes of the halls of residence that they want to build, provided they are located in university cities. Nevertheless, Hütwohl warns that the “minimum size to achieve efficient management is 200 beds”.

“The student residence sector is becoming increasingly more competitive in Spain and we do not want to miss out on the opportunity and the advantage that our international knowledge affords us”, says the group’s executive in Spain (…).

Original story: Eje Prime (by P. Riaño)

Translation: Carmel Drake

Spain’s Student Halls are the Most Profitable in Europe with Yields of 5.5%

14 May 2018 – Eje Prime

As well as being the largest recipient of Erasmus students, Spain is now also one of the most attractive countries for funds and operators specialising in halls of residence. The high demand and shortage of existing supply multiplied the investment in this alternative market ten-fold in 2017, increasing from just over €50 million to €600 million in one year. One of the keys to this growth lies in the profitability of the segment: with a yield (…) of 5.5%, Spain offers the best returns on the whole continent, for nations with more than 1 million students, according to a report from the consultancy firm Cushman&Wakefield.

In this hall of residence boom, which has allowed investments in the segment to grow by 29% across Europe, Spain also led the ranking of the largest operations in 2017. The transaction involving Resa’s portfolio, which was sold by Azora to the funds Axa Real Assets and CBRE GI for €400 million was the largest deal closed on the whole continent last year. Moreover, Operation Rio, which involved the sale of Oaktree’s Spanish portfolio to GSA for €180 million, also ranked in the top 3, a podium that was completed by another deal involving GSA, in that case together with GIC, which acquired thousands of beds from LJ Capital in Germany for €250 million.

The increase in investment will be accompanied in 2018 by a greater number of projects under development. As Reno Cardiff, Director of Capital Markets Business Space at Cushman&Wakefield in Spain explained recently in an interview with Eje Prime, “there is a great appetite for this kind of asset, but there is a shortage of supply”.

Due to the lack of stock right across the continent, consultancy firms and real estate experts are promoting the construction of new halls of residence to receive students over the coming years. Moreover, Cushman&Wakefield highlights another change: interest has increased from institutions looking to construct properties to house students, a cohort that was traditionally forced to rent homes from owners who, in many cases, set abusive prices.

Nevertheless, the growing appetite from funds for halls of residence is not driven by social reasons, but rather as the coming together of a sea of opportunities. In addition, the yields, despite having fallen in the last year, are still higher than those of other segments, such as traditional residential, offices and commercial. Only the logistics market offers yields in line with those of university halls of residence (…).

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

JLL: RE Inv’t in Student Halls Soared to €560M in 2017

4 January 2018 – El Mundo

The volume of real estate investment in student halls soared in 2017 to reach €560 million by year-end, compared to €50 million in 2016, according to data from the real estate consultancy JLL.

That figure of almost €600 million was driven primarily by the sale of two large portfolios, known as Erasmus and Rio. The first related to the sale of Grupo Resa, the largest operator of student halls in Spain, whilst Project Rio corresponded to the sale of a portfolio of student halls that the fund Oaktree owned in Spain, which was acquired by funds managed by GSA in an operation advised by JLL.

Similarly, the investment volume recorded in 2017 also included other operations involving individual assets, such as the recent purchase by the European fund “Catella European Student Housing Fund” of the La Campana student hall, located in the centre of Pamplona (Navarra), as well as the acquisition in March by The Student Hotel of the former print house on Cuesta de San Vicente 28, in Madrid, to convert it into a hall of residence.

In terms of whether this trend will continue, according to Nick Wride, Director of Alternative Assets at JLL, “in 2018, we will not see the sale of large portfolios like in 2017, but we expect the market to continue to be very active, especially with respect to the purchase of land for the development of new student halls and also rehabilitation and change of use projects”.

“Moreover” – he adds – “although interest will continue in Madrid and Barcelona as the large cities, there will also be an increase in investment towards the main university cities outside of those two locations, above all in Valencia, Granada, Salamanca and Bilbao”.

Original story: El Mundo

Translation: Carmel Drake

GSA Wants to Invest €0.5bn in Student Halls in Spain

7 December 2017 – Expansión

The British firm Global Student Accommodation (GSA), which specialises in student accommodation, arrived in Spain in June with the purchase of Nexo Residencias from Oaktree Capital Management. This move, which allowed it to add a portfolio of 2,300 beds in the country, was just the beginning, given that the company plans to reach 10,000 beds by 2025 and invest approximately €0.5 billion in the country. In this way, Spain would account for between 20% and 25% of the firm’s portfolio in Europe, which in turn is expected to account for 45% of the total worldwide.

“To date, we have invested €0.2 billion and we expect to invest approximately €0.5 billion in total”, explained the founder and CEO of GSA, Nicholas Porter, in an interview with Expansión.

Spain represents one of the company’s priority markets, although the firm also plans to expand its presence to other countries in Europe and Latin America, to reach 250,000 beds around the world by 2025. GSA is present in eight countries and thirty cities in two regions: EMEA (Europe, Middle East and Africa) and Asia-Pacific.

“Over there next ten years, there are going to be 100 million more students in university education. That trend is going to be driven by the growth of the middle class in China, India and other regions in Asia. The globalisation of university higher education and educational institutions exporting their brands will allow us to reach more markets than ever”, he states.

Porter explains that, of the company’s objective of reaching 250,000 beds around the world by 2025, “right now, we have achieved 10% of that figure”.

GSA promotes, manages and invests in student halls in locations close to the most important universities in the world.

Specifically, the company currently has projects underway with forecast investment of USD 1 billion around the world and a portfolio under development of around 21,000 beds. Moreover, to achieve its objective, the firm plans to leverage its brand through franchises in other markets, such as, for example, Latin America.

New markets

The company operates its halls of residence through the brands Uninest Student Residences, The Student Housing Company and Nexo Residencias, which it acquired in June 2017, representing its debut in Spain. “We see Nexo as an expansion platform, not only in Spain, but also in the south of Europe and Latin America”.

Currently, GSA has 1,500 operational beds in Spain and 900 beds under construction in Barcelona, which it plans to open in September 2019. Specifically, the operating portfolio is located in the centre of Madrid and includes: Galdós, with 370 beds, in Ramiro de Maeztu; El Faro, inaugurated in September 2016 and located in Moncloa with 358 beds; and Claraval, on c/ San Bernardo, with 186 beds. It also owns the Lope de Vega hall of residence in Alcalá de Henares, which it recently opened and which houses 468 students, both from Spain and overseas.

Moreover, it has two additional development plans underway in Barcelona, which will be ready for use in 2019 with 900 more beds (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

 

GSA With ‘High Honours’ in Spain: Investments of €300 million for New Acquisitions

2 November 2017

GSA’s overall objective is to have 250,000 beds under management by 2025. Barrelling into the Spanish market, it plans to manage 10,000 beds within the next five years.

GSA, a British group specializing in student residences business, has a strong presence in the Spanish market and intends to keep it that way. The company is planning its route in Spain, in which it plans to invest around 300 million euros over the next five years in adding 10,000 beds to its portfolio, as Christopher Holloway, CEO of GSA in Spain, and Miguel Muñoz, GSA’s director of real estate acquisitions, explained to EjePrime.

GSA’s initial foray into Spain was through Nexo, a company that it acquired mid-year from Threesixty Developments, a firm owned by funds managed by Oaktree Capital Management. Nexo took its first steps in the hands of Holloway and Muñoz with the purchase of the Residencia Galdós in Madrid.

In the following years, Nexo acquired more assets in Madrid, Alcalá de Henares and Barcelona. “GreenOak wanted to leave the shareholding since its horizon in the company was five to seven years, and GSA wanted to start operating in Spain,” the executive added. GSA, which sees its investment in Nexo as “something long-term”, is now ready to grow in Spain through the acquisition of new real estate assets where they can develop their business.

While GSA’s overall goal is to have 250,000 beds under management by 2025, barrelling into the Spanish market, the plan is to manage 10,000 beds within next five years. For this, the group foresees an investment of between 300 million euros and 350 million euros, although “it could grow,” meaning that it is an “approximate, not closed” investment figure.

GSA currently manages two projects in Barcelona that will involve an investment of almost 60 million euros

“To carry out our plan for the coming months, we focused our objective on three main tracks: one part would be the purchase of land for the development of new student residences; another the acquisition of assets, with its subsequent rehabilitation and management, and a third possibility, which is the management of third-party assets, through management contract agreements.

GSA, which has a presence in Germany, China, Japan, Australia, the United Kingdom, Ireland and Dubai, has already set to work on the first two projects to be carried out in Spain under its management. They are two residences located in Barcelona. The first, in the South Campus of the University of Barcelona, will involve an investment of 30 million euros. “For now, we have all the licenses to start building, although construction will not start until February,” GSA stated.

The second project in the Catalan capital will be in the Sants Station and will be carried out in collaboration with the Barcelona City Council. This residence, which is already being built, signified an investment by the group of more than 27 million euros.

“We are now looking for new assets in our primary markets, which are Madrid and Barcelona, and then we will expand our focus to other cities, such as Salamanca, as well as cities in the south and north of Spain,” both executives added.

Regarding the purchase of new companies, at the moment, the CEO of GSA in Spain dismisses the possibility: “the only company that could interest a group like ours is Resa, and its sale was carried out recently.” “For now, we do not know of any other company that interests us,” he says.

The business in Spain

As a Spanish-speaking country, Spain receives a large number of Latin American students every year. Of the more than 100,000 international students that arrived in the last year, 10% were Colombians and Peruvians. They are, together with Italians, the foreign nationalities which most contribute students to the Spanish universities.

The Swiss fund Corestate paid 13.5 million euros for a college in Madrid

This international influx, which represents 7% of the total number of students in state universities, has led different funds to become interested in the construction and purchase of residences in the country. The Swiss fund Corestate entered the market last year, through the acquisition of a college in Madrid, for which it paid 13.5 million euros, while Early Capital will build a residence of 10,000 square meters in Esplugues de Llobregat (Barcelona). Also, the multinational The Student Hotel is already active in Barcelona.

In total, the market for student residences in Spain is expected to receive investments of €600 million in 2017, with a return on prime residences of 5.75%, above countries such as the United Kingdom or Germany (5% in both). Just with the sale of Resa, that quota has already been fulfilled.

Original Story: EjePrime – C. Pareja

Translation: Richard Turner