The real estate market is experiencing sweet moments for investment in student dormitories. Major funds in the sector are planning to make strong investments in the market, which has consolidated rapidly in the last five years. “Student hostels remain a fragmented market. Traditional players in the real estate market and other new investors, Socimis, funds and even insurers built to rent Student housing is seen as an attractive option for the real estate industry in a time of transformation. This asset also allows for diversification of portfolios.” Ramon Gayol, partner in charge of KPMG Real Estate in Spain. Favorite cities to invest in are Madrid (11%), Granada (9%), Bilbao (8%), Malaga (8%) and Barcelona (7%), according to a survey by investors among investors. JLL real estate agent presented this Wednesday.
“In Madrid and Barcelona, the demand is very high, but more and more is starting to be met. Seville also has a significant part of the country squares. But there are other cities that have a relevant university presence and need more projects. Cities like Granada, Valencia, Málaga are very relevant, but even some small ones, where such assets are almost nonexistent, are clear candidates for investment. And in fact, large investors in dormitories are already analyzing these small places,” he explains. Roberto Rey, President and CEO of Gloval.
End of the pandemic and increase in rental prices two situations that also support this segment. According to data managed by the Ministry of Universities, the number of students enrolled in universities personally attending classes reached 1,398,782 students (+0.5%) per year. It should also be taken into account that the number of students who decided to move to other provinces of Spain in order to pursue higher education in the 2020-2021 academic year increased by up to 6.4% and the number of students coming from abroad broke a record. Academic year 2021 – 2022. Spain’s reef is important in this market. According to the ranking, Madrid and Barcelona are two of the cities most valued by foreign students. Top 50 cities for students.
Bed offer in student dormitories rose to 102,707 places distributed among 1,075 university dormitories and student dormitories by the end of 2021.It represents a 5.6% increase in the number of places compared to the previous year, according to the JLL study. By city, Madrid is the autonomous community with the largest number of parking spaces at 21.1% of the total. These are followed by Andalusia with 15.7%, Catalonia with 14.9% and Castilla y León with 12.7%, these four autonomous communities focus on 64.4% of the total capacity.
Despite this, however, JLL analysts feel that the current offer in Spain is insufficient to meet the potential demand from university students. In this sense, If the bed supply in 2021 was 102,707 places and the total number of students in the 2020-2021 academic year was approximately 1.4 million, there was a rate of 14 students per bed., which is equivalent to a provision rate of 7.3%. Compared to other European cities, Paris 14%, London 24%, Prague 22.6% or Copenhagen 15.3%, Madrid 7%, Barcelona 7.6%, Valencia 3.6% and Seville 9.6%
“Out of over 1.3 million students (9% of them international), they can take advantage of an offer of 104,000 when only 271,000 units are requested in dormitories. This imbalance between supply and demand is the reason for the introduction of a total of 10,200 new joints by 2026.” gets the work Student Housing Facility Telescope Prepared by EY consulting firm.
Currently, 57.28% of the housing offer in Spain is concentrated in only ten municipalities. These include historic university cities such as Granada (4,825), Salamanca (3,749) and Pamplona (3,149).. Madrid and Barcelona take the lead with 13,818 and 10,111 bed offers, respectively. “There is a lot of demand to be met and this is generating interest among investors. With the end of the pandemic and the skyrocketing prices for rentals and services, dormitories have become a good option for thousands of students,” said Alejandro Bermúdez, CEO of Atlas Real Estate Analytics.
“Some major investors, who until now only operated student residences, have decided to move forward with the promotion and investment of these assets and have set up new tools in Spain to achieve this. Many cities with university prestige attract more students than their time, new ways of living/studying. “They’re demanding up-to-date facilities for… Spain and Portugal still have a long way to go.” Roberto Rey, CEO of Gloval.
investment market
This 2022 investment in student dormitories will reach 1,500 million eurosThis figure is inflated due to PGGM’s acquisition of Resa, but it is much higher than 500 million in 2021 and 300 in 2020. They are the largest owners nationwide, followed by the USA at 22%. The weight of Spanish investors in the sector stock available the number of operational beds is 9%.
By investor type, fund managers account for 46% and pension funds for 28% of the enterprise and construction product. Currently, Resa, MiCampus, Livensa Living, GSA-Yugo and Xior Student Housing are the five operators with the largest number of beds under management. After that, according to information from JLL, the Autonomous University of Barcelona is the public institution with the largest number of beds under management.
Even though Madrid and Barcelona won Most investment in Spain (57% from last quarter of 2021 to third quarter of 2022), but investment activity is becoming increasingly concentrated in other provinces with leading university centers such as Seville, Valencia, Granada, Zaragoza, Malaga or Salamanca, among others. Investment activity in Seville stands out, with the province with the most registered operations since 2021 after the Community of Madrid, with a total of six operations totaling over 110 million euros.
Related news
Source: Informacion
James Sean is a writer for “Social Bites”. He covers a wide range of topics, bringing the latest news and developments to his readers. With a keen sense of what’s important and a passion for writing, James delivers unique and insightful articles that keep his readers informed and engaged.