US Firm Valeo Groupe Wants to Build 20,000 Beds in Student Halls in Spain

11 June 2019 – Cinco Días

After teaming up with Bankinter to invest in Spain last year, the US firm Valeo Groupe has now announced that it wants to become the market leader in the student residence sector. According to its CEO for Europe, Peter Haspel, “Our objective in Spain is to reach 20,000 beds”.

The firm does not have a detailed timeframe at this stage but its target would make it the market leader or one of the largest players in the country, alongside Resa, which currently has 10,000 beds, and Nexo Residencias, which is growing rapidly. Haspel considers that Spain has the capacity for 500,000 beds compared with the existing supply of 98,000.

The company has already designed a first investment plan amounting to between €300 million and €400 million to build 10 halls of residence in Spain and Portugal over the next two or three years.

It has already started work on a project in Granada and is about to launch one in Porto. They will be followed by new halls in other major cities such as Madrid, Barcelona, Lisbon, Valencia, Sevilla and Bilbao.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation/Summary: Carmel Drake

JLL: 47 Halls of Residence for Students are Under Construction in Spain

24 April 2019 – El Confidencial

The student hall sector is on a roll. With almost fifty projects underway (47) and 17,500 new beds to be added to the existing portfolio by 2022, experts forecast total investment of €1 billion in the sector over the next 4 years.

In 2017, investment in the sector amounted to €560 million, ten times higher than the figure recorded in 2016 (€50 million). Last year, the number dropped to €141 million, but according to Nick Wride, Director of Living and Alternatives at JLL Spain, that was “due to a lack of residences in operation available for sale”. Moreover, it was still the highest figure ever recorded excluding corporate transactions – the data in 2017 was impacted by the completion of 2 large corporate deals.

Last year, 18 operations were closed involving the purchase of land or buildings for conversion. 55% of the investment was undertaken in Madrid and Barcelona, with the remaining 45% made in the main regional cities, such as Málaga, Sevilla and Granada. The operators behind the new beds under construction include Nexo, Resa, WPCarey, Invesco, CBRE GI, Axa and GSA, amongst others.

Student halls offer some of the highest yields in the sector: 5.5% in the secondary cities and 5% in Madrid and Barcelona, in line with those generated by nursing homes (5.5%) and logistics assets (5%), but well above those seen in other segments such as retail premises (3.15%), offices (3.50%), residential (3.50%) and hotels (4%).

The reason is the enormous demand that exists for these types of assets. In Spain, almost half a million students need accommodation, but there are currently just 91,000 student beds. The gap is clear, and growing, boosted by an increase in the number of domestic and international students travelling away from home to study. Those not finding student accommodation have to rent in the private market – an informal, heterogeneous, inflexible and potentially expensive option (particularly in Madrid and Barcelona where prices are soaring).

All this makes the market for student accommodation extremely attractive.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

Syllabus Delegates the Management of its Student Halls to Greystar

4 April 2019 – Idealista

The student hall specialist Syllabus by Urbania has signed an agreement with the US company Greystar to delegate it the administration of its halls of residence, which it operates under its own brand.

The agreement covers the functions of marketing, administration and general property management, amongst others, and Greystar is going to assign a dedicated team to its new client.

Syllabus has a portfolio of projects under development comprising more than 2,500 beds, and following its strategic investment agreement with Invesco Real Estate, it is now also working on a growth plan for up to 10,000 units over the next few years.

Greystar, which was founded in 1993, already manages 50,000 beds in halls of residence around the world for brands such as Chapter and Sailmakers in the UK, OurDomain in the Netherlands, EdR and Rockoff Hall in the USA, and Resa in Spain.

Original story: Idealista 

Translation/Summary: Carmel Drake

Greystar to Manage Bilbao’s New 351-Bed Student Hall Atop the Bus Station

31 August 2018 – El Correo

The future Termibus building in Bilbao will mark a before and after in the neighbourhood of Basurto. It will turn the area on its head, in conjunction with the other major urban planning operations being undertaken in the provincial capital. And not only because it will put an end to the problems that the buses have caused the neighbourhood for decades (…). But also because its placement underground will enable the construction of a 9,000 m2 square and a sophisticated 11-storey building, containing a hotel, a hall of residence for students and a shopping centre.

And it is getting increasingly closer because the terminus project, which must be finished within less than a year, is progressing at full speed. (…). After digging the hole, now it is time to build the four below-ground floors, one by one. The two lower floors will house a rotating parking lot with 528 spaces and the upper two floors will contain the aforementioned intermodal station. At the same time, the names of the tenants that are going to manage the property’s services are starting to be announced.

The first to be made public is Greystar. The global leader in the management of student residences and rental properties in Spain has just acquired the educational accommodation complex from the business group Amenabar, chosen by the Town Hall of Bilbao to build the project as a whole. And it has done so after fighting off competition from top-level international firms such as Global Student Accommodation (GSA), Corestate, AMIRA and The Students Hotel (TSH).

The Basque property developer and construction firm will take care of everything. According to sources at the company, “we are going to construct the building, in an L-shape, and we will allocate the right-hand wing to a student residence”. Having completed it in its entirety “down to the last detail in terms of decoration”, it will hand over the facilities with all of the licences so that the manager (through Resa, its subsidiary in Spain) may open its doors in August 2020.

Shopping centre on the lower floors

The agreement reached seeks to make the most of the available space on the eleven floors of the establishment to provide 306 rooms. Most will be individual rooms, although there will also be some doubles, so that the total number of beds will be 351. “All of them will have a bathroom and an equipped kitchen, and 10 will be adapted for users with reduced mobility”, say the sources (…).

The retail space, which will span two floors and will occupy 7,500 m2 in a privileged area of the city, next to the new Garellano skyscraper, has also been put on the market. Amenabar is already receiving offers from a variety of interested parties, from supermarkets to gyms, to shops selling sportswear, textiles, household items, technology, lottery and hospitality “because a large cafeteria is planned to overlook the square”. The business group is interested in enhancing the diversification of the shops “because this area is going to be strategic in nature with more than 10 million people passing through it each year, including Termibus travellers and metro users, who will have a direct connection to the intermodal station”.

The hotel is the other pillar that will complete the comprehensive offering of the Termibus project. The left-hand wing of the building will be dedicated in its entirety to that activity. And, although the deadline for the tender that the Amenabar group has opened to chose the best candidate does not close until the end of October, the avalanche of proposals received is exceeding all forecasts. Sources at the company acknowledge that its privileged location, in the centre of Bilbao, right next to the San Mamés football stadium and with “unbeatable” transport connections, has sparked interest amongst operators from all over Spain and, above all, those that have great international appeal (…).

Original story: El Correo (by José Domínguez)

Translation: 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

 

BNP Paribas: Spain’s Hall of Residence Market Will Grow by 4% in 2019

16 July 2018 – Eje Prime

(…). With 1,148 accommodation centres for university students located all over the country, split between halls of residences (963) and residential colleges (185), the domestic market comprised 93,500 beds at the end of 2017. Nevertheless, that supply “is small compared with current demand”, explains BNP Paribas Real Estate in a report to which Eje Prime has had access. For this reason, the international consultancy firm forecasts that this alternative market will grow by 4% in Spain in 2019.

In recent years, the sub-sector has recorded some major operations involving the sale of both assets and companies. The most important deal came at the end of 2017, when AXA Real Assets and CBRE Global Investment Partners invested almost €400 million in the purchase of the entire portfolio of Resa, the vehicle specialising in student halls previously owned by Lazora. Following the operation, the manager Greystar became the king of the halls in Spain with 37 assets under ownership (four of which were being developed). In total, more than 9,000 beds changed hands.

Resa’s sale is nothing more than a consequence of the current investor appetite, primarily from international funds, many of which specialise in this sector. In 2017 alone, fourteen student halls opened their doors, adding 2,149 new beds to the sector. Moreover, since this is a very fragmented market with many owners, we are seeing the purchase of large bundles of beds, which the new players arriving in Spain are using to initiate their expansion plans.

Such is the case of Corestate, an investment fund headquartered in Luxembourg, which purchased a former residence, containing 260 rooms and 302 beds, in Madrid in 2016 to renovate the building and give it its personal stamp. With support from Villar Mir, the company disbursed €40 million on that project. A year earlier, the Dutch company The Student Hotel paid the same amount for two halls of residence in Barcelona (Melon District Marina and Melon District Poblesec) containing 600 rooms in total.

Those operations led by international funds show the influence that foreign capital has and, above all, is going to have, in the student hall sector. A large part of this interest in the domestic market stems from Erasmus. Spain is the most sought-after country by university students, ahead of Germany, the United Kingdom and France. Two years ago, 45,813 young people arrived in the country, including Erasmus and international students on secondments, and all of them needed to find a bed for the year.

Geographical dispersion

Another one of the major attractions of the student hall market in Spain is its geographical dispersion. It is not only Madrid and Barcelona that are attractive: Málaga, Valencia, Sevilla, Salamanca and Granada are all cities with a large influx of students, many of them international, arriving every year.

Madrid is the city with the largest supply of rooms for students, with 21,159 beds in 198 centres at the end of 2017. That figure accounts for 23% of the total stock on the market in Spain (…). Cataluña was ranked in second place (…) with 170 centres and 14,177 beds, accounting for 14% of the stock. It was followed by Castilla y León (where Salamanca plays an important role) and Andalucía, with shares of 14% and 12%, respectively (…).

Activity is spreading to the north too. Just last week, the fund WP Carey paid €10 million to buy an office building in San Sebastián from Solvia, which it is going to convert into a hall of residence for students (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Resa’s Former CEO Creates 12 Investment Vehicles & Finalises the Purchase of Land for Tertiary Use

27 June 2018 – Eje Prime

Jorge Guarner (pictured below) used to be the boss of the student hall sector in Spain and now he is looking to do the same in the nursing home sector. The director, formerly the CEO of Resa from 1996 to 2002, is guiding the path of Healthcare Activos, a real estate asset manager operating in the healthcare segment, which is pushing ahead with financial support from the fund Oaktree and one aim: to debut on the stock market in 2020. In its process of becoming a Socimi, the company is going to create twelve vehicles to purchase tertiary land throughout Spain.

During the first half of the year, the company has constituted the seventh and eighth of its series of vehicles, whose aim is “the performance, both in Spain and overseas, of property development and construction activities for all kinds of real estate developments, urban planning and land development projects, be they for industrial, commercial or residential purposes”, as noted yesterday in the Official Gazette of the Mercantile Registry (Borme).

Guarner, as the sole representative of the company, has created the companies with the minimum required share capital (€3,000) and he has domiciled them all at the manager’s Madrilenian headquarters, number 26 Calle Raimundo Fernández Villaverde.

Over the next two years, until it debuts on the stock market, a priori, on the Alternative Investment Market (MAB), Healthcare Activos plans to invest almost €500 million in properties in Spain, primarily in nursing homes for the elderly.

The group’s first investment came in December 2016, when Guarner’s firm purchased four buildings that are today leased to the nursing home operator Amavir. Since the first acquisition to date, the group has invested €107 million in eleven assets, of which €62 million were disbursed in 2017 and the remaining €45 million have been spent since 1 January 2018.

The future Socimi also has €14 million committed for the creation of a portfolio of more than forty properties, in different degrees of progress, such as nursing homes, hospitals and clinics, be they fully operational, ready for renovation and launch, or as land development projects.

Guarnar has funds to invest up to €150 million per year until 2021 in the acquisition of assets and development of new nursing homes for the elderly across the country. The latest operation that the manager carried out was the purchase, a month ago, of a property in Vitoria from the specialist operator Abertia-Etxea, for which it paid €5 million.

In addition, in April, Healthcare Activos spent €40 million on three nursing homes in Gijón, Burgos and Valladolid. For that project, the company joined forces with La Saleta Care, owner of the buildings until then, which will continue to manage the properties for the next 25 years.

Guarnar, who was also the CEO of Sarquavitae for twelve years, the main Spanish company in the nursing home sector, has his company central headquarters in Barcelona, where last summer, he invested €15.5 million in the purchase of the Los Tilos nursing home (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

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

TH Real Estate Changes its Focus in Spain to Purchase Logistics Properties, Offices & Alternative Assets

11 June 2018 – Eje Prime

After ten years in Spain, TH Real Estate is changing its focus in terms of acquisitions. The company, which has historically purchased retail assets in the country, is going to change strategy to strengthen its portfolio with logistics properties, office buildings and alternative assets, such as halls of residence for students. That is according to Marta Cladera (pictured below), Director General of TH Real Estate Iberia, talking to Eje Prime in an interview.

“Traditionally, and due to the type of active funds, we have been very focused on the purchase of retail products” – said Cladera – “Now, we want to nurture our portfolio with logistics buildings, offices and alternative assets, such as halls of residence”. “We are analysing the market, we have a good track record in other types of assets, and so we will be able to create a portfolio with new types of assets and we will begin this year”, she added.

TH Real Estate will carry out these purchases through its fund European City Fund, which is one of the most active at the moment in terms of acquisitions and which has sufficient resources to undertake new purchases. By type of asset, the plans in terms of alternative assets involve not only the purchase of properties but also “teaming up with other operators, which may be from other parts of Europe”. In this way, TH Real Estate will follow in the footsteps of other funds such as CBRE GI and Axa, which, in their strategy to enter the hall of residence business, purchased Resa, the largest student hall company in Continental Europe.

In terms of the office sector, Cladera assures that “the competition is fierce” and the supply “is scarce”. “We are looking for buildings costing upwards of €50 million, but the supply that we are finding is not prime and those that are prime due to their location need a lot of renovation work, and that is something that holds us back, given that the numbers have to make sense for us to proceed and we have to focus on returns”, said the director.

Currently, TH Real Estate manages a portfolio worth €103 billion around the world, although Spain represents a small proportion of that, accounting for just 2% of its total business. In the Spanish market, the company owns assets worth €2 billion. “Although it is small compared to other markets, you have to look at the evolution: when we arrived in 2007, the portfolio was worth €200 million, as such, the growth over the last ten years has been significant”, she said. TH Real Estate’s team in Spain comprises nine people.

Socimi: under consideration 

Although this move is still in an embryonic phase, TH Real Estate does not rule out joining the Socimi party that is raging in Spain with some of its assets (…).

Currently, TH Real Estate owns fifteen assets across the Iberian Peninsula, of which fourteen are located in Spain and one in Portugal. Of those, two are logistics assets (acquired in 2017), and the rest are retail properties. One of the formulae that the group has used in the country has been to create joint ventures with different players for the acquisition of assets. Such was the case of the purchase of 50% of Xanadú from Intu for €264.4 million, for example (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

CBRE GI to Invest €800M in Spain in 2018

18 May 2018 – Expansión

The real estate asset manager CBRE Global Investor (CBRE GI) is redoubling its commitment to Spain. After ending last year with a record investment of €800 million and starring in several mega-operations, the firm wants to establish a new record this year, exceeding the milestone set in 2017. From its offices in Madrid, CBRE GI manages assets worth €3.2 billion in the retail, office, logistics and student hall sectors, located in Spain and Portugal, and is getting ready to enter the residential sector.

“Last year was very important given the significant transaction activity undertaken, of which €800 million corresponded to purchases. This year, we hope to match that figure and even exceed it”, explained Antonio Simontalero, Head of Operations for Spain and Portugal at CBRE GI, speaking to Expansión.

The firm works with eight funds and owns a portfolio comprising 19 shopping centres, 37 logistics platforms, three office buildings and 33 halls of residence for students.

Although retail is still the main market for the manager, accounting for 70% of its portfolio, CBRE GI has decided to attack new businesses. Thus, last year, it entered the market for student halls with the purchase, together with AXA IM Real Assets and Greystar, of Resa, the market leader in Spain, for €400 million. “We are continuing to analyse opportunities in the student hall market. We want to grow the portfolio and increase our exposure”, says Antonio Roncero, Head of Transactions for Spain and Portugal at CBRE GI.

Another milestone in 2017 was the consolidation of the manager in the logistics sector following the joint venture signed with Montepino for the development and promotion of logistics assets. “The initial objective of the investment in the joint venture with Montepino was €300 million, but we hope to exceed that figure soon. With the developments underway, we have 80% of the investments committed”.

Simontalero points out that CBRE already had 700,000 m2 of logistics assets under management and the agreement with Montepino will allow the firm to exceed the 1 million m2 threshold. The logistics sector is thereby becoming the manager’s second segment by volume, accounting for almost 15% of its total assets. “The differentiating feature of this joint venture is that all of the assets are going to be latest generation, which is what the main operators require”, adds Roncero.

Rental homes

In terms of next steps, CBRE GI is preparing to attack a new market, specifically, the residential rental market. “We are analysing various options with different partners, either through the development of new-build properties or by investing in a business through the purchase of portfolios”, say the directors.

For Simontalero, the size of the rental market vs. the purchase market in Spain is going to grow and will move into line with the rest of Europe. “There is latent demand that is not being fully satisfied with the current supply in the market”, he said.

For Roncero, the key is in the service. “We see an opportunity for offering a professionalised service in the rental home segment, providing security to the tenant and placing emphasis on the maintenance of properties”.

Roncero says that the objective of CBRE GI involves gaining “critical mass” in the sectors to which it is least exposed in order “to diversify and be more versatile”.

Sales

In addition to growing its portfolio with new properties, the company is continuing to rotate its assets. Specifically, last year, it sold four shopping centres (two in Spain and two in Portugal), and it is now preparing to sell three more – Gran Casa (Zaragoza), Valle Real (Cantabria) and Max Center (Barakaldo) – whose ownership it shares with Sonae.

“Our business involves identifying investment opportunities, managing them and selling them to generate returns for our investors”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake