The real estate investment map in Spain is being redefined, and one segment in particular is shining brightly: student residences. This asset, a fundamental part of the Flexible Accommodationhas overtaken traditional rental housing as the preferred destination for investment capital, confirming a growing trend towards specialisation and the search for more profitable and stable models.
Forecasts for 2024 are strong: the volume of investment in student halls of residence is expected to reach 700 millionwith projections that could even approach the 1 billion. This would represent a significant increase in the 40% with regard to the 500 million euros invested by 2023. A leap that reflects the market's confidence in the strength and growth potential of this asset class.
The attractive returns offered by these investments are a key factor. The yields (yields) prime for student halls of residence are in a competitive range of 4,5% to 4,75%. This return is considerably higher than what is currently observed in the traditional rental housing market, where yields range from 3,5% and 4%.
But it is not just a question of numbers. The student residence sector is perceived as "resilient" due to structurally robust demand. Spain has more than 1.7 million university studentsof which a significant 13% are internationalThis ensures a constant flow of occupancy. However, the current supply of beds barely exceeds the number of beds available. 115.000generating an estimated deficit of between 100,000 and 200,000 beds to fully meet existing demand. This gap creates an enabling environment for new investments and developments.
Increasing regulatory uncertainty in the traditional rental market, exacerbated by regulations such as the Housing Act and price control measures, has diverted investor interest. Faced with a legal framework that may be perceived as less favourable or with higher risks, institutional funds, both national and international, are looking for safer and more profitable alternatives. In this scenario, the Flexible Accommodationwhich includes both student residences and coliving and other mid-stay models, emerges as a "safe haven" for capital.
The future expansion of this segment is promising. A continuous development of new projects is anticipated, especially in the large university cities of the country, such as Madrid, Barcelona, Valencia, Seville and Malaga, which concentrate most of the student population and, therefore, the demand of Flexible Accommodation quality.
