While student accommodation is already a vibrant sector in the UK and Germany, increased investor interest in halls for Spain’s 1.4m university students could be just around the corner.
Although Spain is not as mature a location as the UK or Germany, property deals involving student housing are becoming increasingly attractive, CBRE said in a report monitored by local business portal El Confidencial. Only 20% of halls of residence in Spain are owned and operated privately and the rest are publicly owned or belong to universities or institutions and managed under concessions. Deals in Spain have not been as high profile as those in the rest of Europe but the largest during 1H15 was The Student Hotel’s acquisition of a portfolio containing two halls in the Melon District of Barcelona. The buyer was acquired by US fund manager Perella last year.
CBRE said three of the 10 largest transactions closed in Europe in first half involved portfolios containing student halls, and this year around €1.5bn was spent on a single student hall portfolio in the UK. In Spanish capital Madrid, two important concession agreements, both in the Ciudad Universitaria neighbourhood, have changed hands, and construction has begun on the Residencia El Faro, a 370-key project that will be operated by The Student Hotel. The same operator will also manage a larger project of 570 keys under development in Barcelona.
CBRE predicts that, given the high level of interest from international investors and managers, several transactions could be closed over the next few months. Spain has four of the top 10 cities most popular with European students wishing to participate in the EU’s Erasmus program.
Source: Property Investor Europe