CG Capital Europe: Spanish Student Housing Sector in 2022
Student housing accounted for 31% of the total investment in living (c.€1.4 billion), evidencing the growing investors’ interest for this sector.
As of Q4 22, prime yields stood at 4.6%, having increased only 0.1% since Q1 22, being one of the most stable yields of the real estate market.
Demand is mainly driven by two factors:
- The gap between supply and demand. The student bed provision rate is still lower compared to other European countries (Spain’s rate is 7.3% compared to the European average, which stands at c.19%).
- Spanish universities are well considered worldwide, attracting a great deal of foreign students, as well as from national students who move to other provinces to attend them.
The average rate for a bed in Spain is €757/month, although in Madrid, Barcelona and Pamplona, the cities which take in most of the students, prices increase to €1,096/month, €931/month and €884/month, respectively.
In terms of beds, as of FY22 supply in Spain reached c.100.000 beds, with c.18,000 more under development. The low supply has meant that c.34% of all investment’s transactions were forward purchase or forward funding.