In the first semester of 2022, Spanish student residences registered an investment of more than 465 million euros, as shown in the latest CBRE living report. This figure represents 19% of the total investment in the living sector, which reached 2,451 million euros in this period. That is why this asset class has established itself as a key real estate asset for investors.
In the 2020-2021 academic year, nearly 1.7 million students enrolled in Spanish universities, a figure that increased by 3.2% compared to the 2019-2020 academic year. In 2022, the investment appetite for this sector has also increased: Spanish student residences have become the second asset class with the highest investment within the Living sector, behind Multifamily Housing (MFH).
For Carlos de la Torre, director of Real Estate Investment Banking at CBRE Spain: “Student residences have proven to be a defensive and countercyclical sector in recent years. The gap between supply and demand is among the largest in Europe and we estimate that the number of students will continue to grow in the coming years, not only foreigners but also national mobility students. Additionally, it is a very attractive business for investors, with very high operating margins (60% EBITDA margin) and high cash generation”.
According to CBRE data, in 2021 there were 554,000 students with accommodation needs in Spain, of which 192,000 (35%) were international and Erasmus program students, while the remaining 362,000 (65%) were national students with internal mobility. However, so far this year, the number of national students is increasing, reaching 94%.
Miriam Goicoechea, Director of Research at CBRE Spain, points out: “The rate of provision of beds over permanent students in Spain is 6.5%, far from the European average, which stands at 19%. This indicator highlights the existing supply deficit in the face of growing demand and which translates into the large number of operations closed in the first half of the year. In terms of returns, we continue to see the strength of this segment and the short-term outlook is favourable.”
Currently, Spain accounts for 63% of operating beds, which are already considered obsolete, a figure that is 50% higher than in the main European markets. Thus, according to CBRE forecasts, at the end of 2022 Spain could offer 114,000 beds in student residences, 8% more than the previous year.