16 December 2019 – The student housing sector in Spain is in the midst of an almost unprecedented boom. The country is home to 500,000 non-resident students, 100,00 of which come from the Erasmus program. The problem and the subsequent opportunity stem from the fact that a large part of the current supply of rooms is outdated and unattractive. Returns on student housing projects also tend to pay around 5% compared to 3-3.5% for residential and office developments.
There are currently 20 consortiums of institutional investors, local developers and housing operators investing in student housing projects in Spain. Grupo Moraval is the largest developer of student residences by the number of beds and plans to develop 6,500 places in Madrid, Barcelona, Bilbao, Salamanca, Pamplona, Seville, San Sebastián and Malaga by 2023. That figure is equal to 25% of the new residences planned for inauguration over the next three years.
Market studies by Grupo Moraval have shown that, between 2019 and 2022, the supply of beds is projected to grow by 22%: 94,000 beds in 2019 (3.3%), 99,500 seats in 2020 (5.9%), 106,500 in 2021 (7%) and 111,000 beds in 2022 (4.2%). nvestors are planning one billion euros in total investments by the time, according to Nick Wride, a director at JLL Spain.
That growth is already forecast to increase the capacity for supplying students with accommodations to 30% in Madrid, Barcelona, Seville, Bilbao, Valencia and Pamplona. At the moment, the supply in those cities is enough for just 15% to 20%.
Original Story: El País – Sandra López Letón
Adaptation/Translation: Richard D. K. Turner