The Student Hotel Raises €90-Million in Financing for New Investments

14 October 2019 The Netherlands-based student hotel group The Student Hotel (TSH) announced that it had obtained €90-million in bank financing Santander, Sabadell and HSBC. TSH will use the funds to build two new hotels in Madrid and Barcelona as well as to refinance its existing debts in Spain. The investments are part of a €2-billion investment strategy that the group plans to implement over the next five years in Europe.

TSH is currently working on three projects in Spain: Madrid La Imprenta (340 rooms), Barcelona Provençals (300 rooms) and the TSH San Sebastian (328 rooms).

Original Story: Hosteltur

Adaptation/Translation: Richard D. K. Turner

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

The Student Hotel to Invest €110M in 2 New Mixed-Use Student Halls/Hotels

15 March 2019 – Eje Prime

The Student Hotel is going to invest €110 million in order to open two new mixed-use student halls/hotels over the next few years in Madrid and Barcelona.

The first, located in a former print house at number 28 Cuesta de San Vicente in Madrid is expected to open in September 2020 following a €60 million purchase and renovation project. Once completed, that property will have approximately 340 rooms, a parking lot, a coworking office space and common areas including a lounge bar overlooking the Royal Palace.

The second, located on Calle Provençals in Barcelona, in the heart of the 22@ district, is scheduled to open in January 2021, following a €50 million investment. It will comprise around 300 bedrooms, a coworking office, common areas as well as a cocktail bar on the rooftop.

TSH is launching a new operating model for these properties, which combines short term lets with accommodation for students. The mixed-use aspect of these building means that between 45% and 50% of them will be used for student residences and the rest for hotel purposes, which will offset the seasonality of the two models.

Besides the two openings described above, TSH is also considering opening other hotels in Valencia, Málaga, Sevilla and País Vasco, in Bilbao and San Sebastián.

Original story: Eje Prime (by Marta Casado Pla)

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

 

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

The Student Hotel Invests €10M in its Second Hall of Residence in Barcelona

20 April 2018 – Eje Prime

The Student Hotel has doubled its presence in Barcelona. The Dutch company has invested €10 million in the remodelling of its new student hall of residence in the Catalan capital. The asset, located in the Pobleneu neighbourhood, will be called TSH Campus Marina and will have a surface area of 21,200 m2, which will be able to accommodate around 500 students.

With this new building, the group is debuting the TSH Campus brand, which is going to specialise in accommodation for undergraduate and post-graduate students. In addition to the 500 bedrooms, the complex will also contain 50 kitchens, four swimming pools, study rooms and a laundry, as well as a restaurant (La Forastera), which will be managed by Grupo Raval, according to explanations provided by the company.

The company, owned by Charlie McGregor and the funds Aermont Capital and APG, arrived in Spain in 2015 with the purchase of two halls of residence in Barcelona from the Melon District group. Like in the case of the hall of residence in Poblenou, the company’s first property in the Catalan capital, located in Poble Sec, was also subjected to a complete renovation.

Plans for the future: €240 million of investment and an opening in Madrid

One of The Student Hotel’s next steps in Spain is going to be the opening of its first hall of residence in Madrid in 2019. That purchase forms part of a €240 million investment plan that the company led by McGregor is going to carry out in the country, where it plans to open up around ten properties for students.

The objective of the company is to find opportunities in Bilbao, Sevilla, Santander and Granada, amongst other cities, to continue growing its domestic portfolio and for Spain to become its second reference market, behind only Italy, where it expects to have thirteen halls of residence. In total, The Student Hotel is going to invest €1.6 billion to accumulate forty establishments across Europe by 2021.

Original story: Eje Prime

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

Savills: Inv’t In Student Hall Market Will Far Exceed €600M In 2017

31 October 2017 – Eje Prime

Between €500 million and €600 million. That was the price paid by a group of international investors to acquire Grupo Resa, the largest platform of student residences in Spain, with 9,309 beds in 19 cities, including in Madrid, Barcelona and Salamanca. AXA Real Assets, CBRE Global Investment Partners and Greystar backed the company, a significant investment that goes hand in hand with the rise of this alternative market in Europe. This operation is a clear example of the boost that this alternative asset is enjoying in the real estate sector in Spain and across Europe.

In neighbouring France, investment in the sector rose by 245% and the forecast is that €250 million will be invested in transactions in 2017. But if there is a country whose student hall market has grown beyond all doubt, it is Germany. The German market has seen a five-fold increase in investment in student residences (380%) and expects to exceed the €1,000 million threshold by the end of this year.

These results all indicate that the whole European continent is now taking this market seriously, although there are still countries where the student hall business is much larger. In 2016, the main players in this sector, the USA and UK, saw a record-breaking volume of transactions involving the purchase of assets of this kind, amounting to €14,100 million, up by 5.4% compared to 2015 (…).

Data from the World Student Housing study, prepared by the real estate consultancy Savills, shows that migration is increasing in the world each year. Almost five million students studied overseas during 2015, which represents an increase of 130% since the beginning of the 21st century. The forecasts indicate that 8 million students will study abroad in 2025.

The Spanish case: great influx and new projects

As a Spanish-speaking country, Spain receives a large volume of Latin American students each year. Of the more than 100,000 international students that it welcomed last year, 10% were from Colombia or Peru. They are, together with the Italians, the overseas nationalities that flock in the greatest numbers to Spanish universities.

This international influx, which accounts for 7% of the total number of students on the state university map, has sparked interest amongst different funds looking to build and buy student halls in the country. The Swiss fund Corestate entered this market last year, with the purchase of a hall of residence in Madrid, for which it paid €13.5 million, whilst Temprano Capital is going to build a 10,000 m2 student residence in Esplugues de Llobregat (Barcelona). Moreover, the multi-national The Student Hotel is now active in Barcelona; and ThreeSixty Developments, a fund managed by Oaktree, sold the Nexo student halls to GSA.

In total, the student hall market in Spain expected to see investment of €600 million in 2017, with a yield on prime residences of 5.75%, above those in countries such as the UK and Germany (5% in both). With the sale of Resa alone, that target has already been fulfilled (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

JLL: Investment In Student Halls Could Reach €600M In 2017

13 March 2017 – Observatorio Inmobiliario

Student halls of residence are attracting interest from real estate investors. In fact, experts calculate that the volume of investment in this kind of property in Spain could amount to around €600 million in 2017, a vertiginous increase with respect to the figure recorded in 2016, when investment amounted to €45 million, according to estimates provided by the real estate consultancy JLL. (…).

In this context, JLL has prepared a report “The student residence market in Spain”, which analyses, for the first time, the weight and forecasts for this market sector within the wider Spanish real estate market.

According to Nick Wride, Director of Alternative Investments at JLL, “several factors explain the interest in this project. Spain is one of the favourite destinations for international students to spend some of their educational years, which means there is a clear demand for accommodation. In addition, the market has a lot of potential because it is only just beginning and it is already offering some attractive returns with respect to other products – there is no doubt that halls of residences are going to be one of the star real estate products of the year”.

In fact, the initial return from prime halls of residence in Spain is 5.75%, above the yields generated in countries such as the UK and Germany (5% in both cases), where the market is very developed.

Need for supply

At the end of 2016, Spain had 1,129 university halls of residence and colleges, which translates into just over 91,000 beds. By autonomous region, Madrid had the highest number of beds, accounting for 19% of the total, followed by Cataluña (15%), Castilla y León (14%) and Andalucía (12%). Those four autonomous regions accounted for 60% of Spain’s total stock.

Spain has a university population of 1,513,513 students, of which 6.3% are from overseas. This presence is more palpable for students studying Masters (19.2%) and Doctorates (23.3%). 45% of these international students come from Europe, 25% from Latin America and the Caribbean, 10% from Asia and Oceania and the remaining 20% from other regions.

There is a large difference between the projections for expected demand and the current supply in terms of student beds, given that around 375,000 students are estimated to be looking for accommodation (in student halls or rental homes in Spain). If to this we add the fact that over the next two years less than 2,000 new beds are expected to come onto the market, it is clear that a need exists to generate more supply to meet this demand. (…).

The first major operation of the year

Last week, the student halls chain The Student Hotel (TSH) acquired the “La Imprenta” building from Threesixty Developments, a company owned by the US fund Oaktree Capital Management. The property is located on the central Madrilenian street of Cuesta San Vicente, 28. TSH plans to convert the building into a mix-used hall of residence and hotel. The real estate consultancy JLL participated in the operation as advisor to the vendor.

This is The Student Hotel’s second purchase in Spain, following its acquisition of two student halls in Barcelona at the beginning of 2015, Melon District Marina and Melon District Poble-Sec, in an operation that was also advised by JLL. (…).

Original story: Observatorio Inmobiliario 

Translation: Carmel Drake

JLL: 3 Large Funds Want To Buy Student Halls In Spain

29 March 2016 – El Economista

Investment funds have been buying real estate in Spain for years and during that time they have acquired the best hotels, skyscrapers and shopping centres in the market. Now that those assets are no longer offering such high returns, investors are starting to look at alternative assets, including student halls of residences.

The US fund Oaktree, through the company Knightsbridge Student Housing, Round Hill Capital and The Student Hotel (TSH) are just some of the players that are currently looking for investment opportunities in this sector, according to Nick Wride, Director of Alternative Investments at JLL.

“For the best assets in operation, yields should be between 6% and 6.5% for the best locations”, says Wride, who recalls that these properties have to generate a higher spread than residential products, because they require more management”. The user is more demanding, there is more rotation and, in many cases, in addition to accommodation, these sites also provide catering services”.

Currently, Knightsbridge Student Housing is the most active firm in Spain. “They saw the opportunity before anyone else and they have led the way for other investors, who are now showing a great deal of interest in these types of assets in the country” explains Wride.

The firm owned by Oaktree currently owns one hall of residence in Madrid with 370 rooms, namely the Galdós hall, located in the Ciudad Universitaria.

At the end of last year, it acquired the Sucesores de Rivadeneira print works, which used to house the former printing press of the Gaceta de Madrid, located on the Cuesta de San Vicente, in the centre of the capital. The project, which will have 350 rooms, has not been started yet but is expected to become operational for the 2018/2019 academic year.

The manager is also preparing to open halls of residences in La Plaza de Cristo Rey (El Faro) and Calle de San Bernardo (Claraval), with 550 rooms, next year and is working on a 500-room project in the historical centre of Alcalá de Henares, which is due to be completed between 2017 and 2018.

The group also has a presence in Barcelona, where it was awarded two concessions by the Administration. Nevertheless, both projects have been suspected due to the hotel moratorium imposed by the mayoress, Ada Colau. (…).

Operation in Barcelona

The Student Hotel, the platform that was acquired by the US fund manager Perella at the end of 2014, is the other firm specialising in the sector that is looking for more projects in Spain. Last year, it participated in an important transaction in Barcelona, where it acquired a portfolio of two halls of residences in the Melon District (Poble-Sec and Marina). Both had belonged to BBVA and contain 597 rooms and 152 parking spaces, as well as around 3,465m2 of adjoining restaurant space in different areas of each building.

According to sources at the time, that operation amounted to almost €45 million. (…).

On the other hand, Nick Wride says that Round Hill Capital is also interested in investing in the country. “They have not made any purchases here yet or developed any projects for students in Spain, but they are looking actively”.

That firm starred in one of the most significant transactions at the European level last year when it sold The Nido Collection to the US firm Greystar Real Estate Partners for €847 million. (…).

Expectation and competition

(…). Nevertheless, halls of residence in Spain often do not comply with the criteria that these investors are looking for. “Funds have to justify movement of capital into a country with large projects, those containing at least 200 rooms. The typical halls found here tend to be smaller and many have double rooms. Now, the trend is increasingly moving towards individual rooms”, says Wride. (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake