MÁLAGA, Spain – While learning to develop video games, 21-year-old David León Serrano had an experience quite unprecedented for a Spaniard: living in student accommodation on the south coast of Spain, a five-hour drive from his family home in Madrid.
Studying away from home is a familiar experience in many parts of the world, but a relatively new phenomenon in southern Europe. In Spain, for example, only around 17% of students do their higher education outside their home region, according to the Spanish government. In the United States, by comparison, residents make up less than 20 percent of the student body in most states.
“I think young people are now starting to understand that if we move at least in our own country, it is good for our development,” said Mr. León Serrano, “not only in terms of finding the best place to study what we want, but also in terms of independence and becoming a more complete person.
Her studio, which includes a kitchenette and a bathroom, costs 700 euros (almost $ 800) per month, paid for by her parents. The Málaga Residence is one of 13 student housing units managed by Livensa Living, which is partly owned by Brookfield Asset Management in Toronto.
The growing mobility of the Spanish student population is fueling an increase in investment in student dormitories, which are largely financed by foreign capital. Investors are also following Spain’s growing appeal to foreign students wishing to study there.
Spain’s sunshine and outdoor lifestyle have helped make it the first choice for students participating in Erasmus +, the European Union‘s academic exchange program. Spain has also started to attract more and more Latin American students, especially those whose first language is Spanish, and it is a popular choice for participants of study abroad programs. in the USA.
Campus life has been on the back burner for much of 2020 by the pandemic, but students have returned in large numbers, especially keen to enjoy the community lifestyle they lacked when much of the world was out. in confinement. Real estate investors have followed suit.
In Malaga, for example, the number of student accommodation beds has increased by almost 50% over the past year, according to a study released in September by JLL, a real estate services company. Highlighting the rebound, new investments in the sector reached 140 million euros in the first half of 2021, up 140% from the previous year.
Real estate investors are entering a Spanish student housing market which they believe was not only underperforming, but also in dire need of an overhaul.
Catholic religious orders have long dominated the student dormitory market in Spain, and they still provide about half of its beds. But these Catholic residences rarely have the gymnasiums, movie theaters, and other facilities that today’s generation of students expects, and many also enforce conservative rules, especially to ensure that students live apart. And at a time when the Spanish Catholic Church struggles to attract its own new generation of nuns and priests, it also faces a shortage of staff in its residences.
“Over the next decade I think all religious orders are in danger of being understaffed,” said lvaro Soto de Scals, managing director of Grupo Moraval, a Spanish developer specializing in the construction of student accommodation, especially for Livensa. In May, Moraval formed a joint venture with EQT Exeter of Sweden to invest 500 million euros in student accommodation in Spain.
On the other hand, “student mobility is increasing, as is the appetite for better education,” said Soto de Scals.
One of the reasons for lower student mobility in Spain is “a very strong parenting culture, especially compared to my experience in the UK where you pretty much expect to find your own accommodation once that you will be 18, ”Amber Banks-Smith said. , the British deputy director of the Livensa student residence in Malaga. In fact, parents pay the rent and handle other administrative matters on behalf of most resident students, she said.
Spanish lawmakers are also making it easier for developers to obtain building permits for dormitories, not only to help students but also to free up housing for other residents in their crowded cities. Moving students out of city centers “is one way to relieve some of the pressure in the residential market,” said Soto de Scals.
Ashraf Bachiri, a Moroccan student, moved to Livensa’s new premises in Malaga last year, after sharing an apartment with two other students in downtown Malaga. The cost of his Livensa studio is double what his father paid for the shared downtown apartment, but “my dad also felt it was safer for me to have my own space and live. in a well-run place, ”Bachiri said. Livensa offers 24-hour surveillance around its enclosure, which is equipped with security cameras.
Spain has around 1.6 million students at its universities. There are about 100,000 beds in student dormitories, a shortage of about 450,000 beds needed, according to the JLL study. Even if the pace of housing construction accelerates, the gap is expected to widen over the next decade as the number of students in need of housing is expected to grow even faster.
“Spain has a very strong pipeline for the next two years, but we still believe there is room for more,” said Juan Manuel Pardo, a Spanish executive at JLL. Although foreign students also contribute to growth, he said, “what drives demand the most is the increased mobility of students in Spain”.
Besides Brookfield Asset Management, several other foreign investors have entered Spain. Spain’s largest student housing operator, Resa, was acquired by Axa, the French insurance company, and CBRE Investment Management in New York in 2017. Student Experience, a Dutch company funded by Rinkelberg Capital, announced five projects in Spain totaling around 5,000 beds. , including one in Pozuelo de Alarcón, near Madrid, which local authorities approved in May.
Xior, a Belgian company, started investing in student accommodation in Barcelona and Madrid in 2019, and now owns 15% of its portfolio in Spain. It is mostly building from scratch, but in September Xior won a contract to convert a former army barracks into student accommodation in central Zaragoza, a Spanish city that has long been a training ground for the army of the country.
Xior focused on Spain, as well as neighboring Portugal, as he found that “the existing supply was really limited and outdated,” said Christian Teunissen, managing director of the company. Both countries are now experiencing “a big change in supply,” fueled by the demand for student dormitories that are safer and better equipped than older apartments in the city.
As a student, Mr. Teunissen recalls, “we just wanted to have fun” in a student building, without worrying about issues like fire safety infrastructure. But he added that today’s students “want to check in in a real apartment, they want more luxury, and even shared bathrooms are no longer acceptable.”