There is a shortage of student beds. Spain has become a top destination for international students. According to the latest official statistics released by the Ministry of Science, Innovation and Universities, more than 180,000 foreign students officially enrolled in Spanish universities, 6.1% more than the previous year.

In total, there were 149,278 incoming international students (those who come to Spain to study in person within the Spanish University System), a 10.2% increase from the previous year. This number has continued to grow since then, driven by the establishment of new private universities and postgraduate programs. The surge has created an opportunity for the student housing market, which in Spain had been underdeveloped and focused mainly on residence halls linked to religious organizations.

However, even though the market is expanding, current and future housing supply is still insufficient to meet the much greater expected demand, according to experts in the PBSA (Purpose-Built Student Accommodation) segment. The eight major university cities receive 797,816 students each year but only have 66,751 beds available, with just 18,637 more under construction.

Differences by City

The imbalance between supply and demand is more pronounced in some cities than others. According to data from the Ministry of Science, Innovation and Universities and the universities themselves, Salamanca has the highest proportion of beds per student, at 20.5%, while Valencia sits at the opposite end with only 4.4%. This, along with other factors, has contributed to Valencia experiencing the highest rental price increases in Spain in 2024.

It’s not only about demand growth, there’s also a push for higher quality. Students are increasingly choosing private residences, while investors and operators are showing strong interest. In the current market context, operators must seek to maximize net operating income through value creation and margin expansion.

The bed provision ratio indicates the percentage of available residence places relative to the total number of students in a city. It’s a key indicator for understanding the level of university housing coverage, the higher the percentage, the better the demand is being met.

Comparing Spain’s main university cities, Salamanca leads the ranking with a 20.5% ratio and 822 new beds under construction. It’s followed by Granada (10.6%, 357 beds under development) and Seville (9.9%, 1,445 beds planned). In Málaga, the ratio is 9.6%, with 1,385 new beds projected.

Below 10%, Madrid reaches only 8.4% coverage, despite having 4,045 beds under construction. Zaragoza stands at 7.8%, developing 1,436 new beds, while Barcelona shows a 7.3% ratio with 5,455 beds under development.

Valencia, for its part, has the lowest ratio at 4.4%, though 3,692 new beds are being planned. Nevertheless, its relevance is significant, as it’s considered a Tier 1 city in the student housing sector and ranks third in Spain by number of university students. Moreover, Valencia has seen the largest rent increases, up 8.7% in 2024, surpassing Madrid (5.8%) and Barcelona (5.2%).

Although new residences are being built in nearly all cities, the current supply remains insufficient to meet the high housing demand, especially from international students. Consequently, there’s a clear need to expand university residential capacity in Spain’s main cities.

At CG Capital Europe, we work closely with international funds, institutional investors, and corporations to identify, structure, and execute real estate investment opportunities across all asset classes in Spain, including pbsa, retail, offices, residential, hospitality and logistics. With privileged access to global capital, deep market knowledge, and a proven track record in complex transactions, we provide strategic advisory services that enhance value creation and investment performance. The strong fundamentals of the Spanish market continue to drive robust growth in the sector, positioning CG Capital Europe as a trusted partner for those seeking to capture the most attractive opportunities in one of Europe’s most dynamic real estate markets.

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