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