The residences are gaining ground compared to the ‘student apartment’ and attracting funds

In Spain there are 1.5 million university and postgraduate students each year. Of them, a third, more than 500,000, carry out their studies outside their city or are international, as is the case of the 60,000 young people who arrive from all over Europe to Spain with the Erasmus program. And these students need housing. However, the low supply of rental apartments and the high demand, the increase in prices due to the rise in tourism, the requirements demanded by owners or deposits and the advance notice needed when reserving an apartment complicate the search process. And this is where the student residence segment begins to grow in Spain.

An alternative to the shortage of rental homes and a flourishing business that is attracting various European and North American capital funds to our country. To the point that the consulting firm JLL estimates that in the coming years more than 6.82 billion euros will be invested in the sector to go from the current 115,000 places to more than 180,000 in 2035.

There are no places in student residences

In Spain, despite the ‘boom’ of recent years, there is a lack of places in student residences and today more than 80% of those 580 beds are in rental apartments and less than 20% in residences, but demand It is increasing and “STAYING IN AN EXPONENT WAY,” Javier Ríos Fernández, CEO of Uniscopio, a Comprehensive Orientation Platform for University Students that, among other services, puts these communities in contact throughout the country, tells the information.

“I wouldn’t talk about a ‘boom’,” explains Ríos, “but about a process that began 10 or 12 years ago in Europe and is now beginning to develop strongly here. In Spain there is one place in residences for every four applicants, with a coverage rate of 4% compared to the 10% average in Europe. And we are also moving from a model of residence halls, which continue to exist, to another of residences, which offer students comprehensive services, with new technologies and amenities, with modern buildings that incorporate gyms, study areas, play spaces, swimming pools. , paddle tennis courts and even activities and events for personal and professional development. University residences are, ultimately, a valuable option due to the security and tranquility they offer to families,” concludes the CEO of Uniscopio.

Residential rental tension

And this process towards residences that is taking place in our country in the face of the growing tension in the residential rental market is whetting the appetite of international funds, “mainly European, but also from the other side of the Atlantic,” Uniscopio says. Thus, among the main real estate operators in this sector are Resa – which in August last year was sold by Axa, CBRE IM and Greystar to the Dutch pension fund PGGM for an amount close to 900 million euros -, MiCampus , owned by the Stoneshield fund (between Resa and MiCampus there are more than 20,000 residential beds), the American Yugo, which has about 4,000 beds and several projects in the portfolio and under execution, Livensa Living, from Temprano Capital, the Belgian Xior, the joint venture between EQT Exeter and the Moraval Group, Student Experience, TPG and Urbania…

“Between all these companies and some more, there will now be up to 50 new residence projects underway in Spain, with an investment of nearly 3,000 million euros and that in two years, by 2025, will increase the number of existing places in our country from the current 115,000 to about 130,000,” says the CEO of Uniscopio.

“It is a fundamental investment”

Residential places for students are distributed throughout the country, where they are proliferating the most is in those university cities with serious tensions in the rental market such as Madrid, Barcelona, ​​​​Valencia, Málaga, San Sebastián, Palma de Mallorca, Pamplona, ​​​​​​Santiago de Compost ela or Tenerife. Cities where a room in a shared apartment can cost between 500 and 600 euros per month. The national average for the price of renting a room in a student residence is around 750 euros per month, although in cities like Madrid or Barcelona it can reach 1,000 or 1,200 euros.

“Companies that are investing in new residences must take into account that it is essential,” says Ríos, “to offer adequate and interesting services, comprehensive for the student, at reasonable prices, attractive for the student and their families, because if the price If the price here also becomes exorbitant, it will be impossible to carry out that process we were talking about, already consolidated in Europe and to which Spain is now joining. In addition, it must offer adequate services and build student loyalty to try to stop the trend that exists whereby a student the first year he arrives in a new city goes to a residence, but then, when he has already met people, the second or Third year, he goes to a shared apartment.”

“It is a process already consolidated in Europe that Spain is now joining”

According to the DBK Sector Observatory of Cesce, at the end of 2022, 1,093 student residences were operating in the Spanish market, with 110,368 places. In that year of 2022, the number of centers increased by 26 and the total offer of places increased by 9,024 units. This accentuated the growth trend of recent years, since since 2019 the number of centers has increased by 60 and the number of places by 18,062. DBK explains how “in recent years, various corporate operations have been registered in the sector with the entry of new operators, the purchase and sale of assets and the launch of new projects.”

In the same sense as JLL and Uniscopio, it predicts that “in the 2023-2024 biennium the trend of growth in supply will continue, with the launch of numerous projects. It should be noted that there continues to be a mismatch between supply and demand for residential places. Which strengthens the attractiveness of real estate investment in this type of assets. It is estimated that in the next two years the total capacity will increase by more than 10,000 new places, reaching 122,000 in 2024. Student residences thus become, in fact they already are due to the numbers they present, one of the The most attractive business and investment niches in the entire Spanish real estate market.

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