Although Spain leads investments in student residence halls in Europe, it has a deficit of 450,000 beds affecting both domestic and international students, with a growing demand that far exceeds the existing supply.
There are currently 115,000 beds available—up 4 per cent compared to 2022. However, an estimated 580,000 are required to meet student accommodation needs. A bed provision rate of 6.7% ranks Spain at the bottom of Europe, well below the 18% European average. With the growth in the number of students and the increase in the international student population, this deficit could worsen in the coming years.
Seizing The Opportunity
A rise in the student population, coupled with a growing stream of international students, reflects the need to increase the number of beds available in Spanish student residence halls. The market is currently highly undersupplied, with much of the infrastructure now being obsolete. With one of the lowest coverage ratios in Europe, this situation, together with the massive arrival of foreign students, positions Spain as a great attraction for foreign investment in the sector.
The student residence hall segment has emerged as one of the areas of interest within the property market, particularly for international investors. In fact, in 2023, this asset type represented 23% of total investment in the Living segment in Europe. This makes Spain the main destination for investment in student residence halls, ahead of countries such as France and Italy.
In addition, high-profile transactions, such as the purchase of two residence halls by Morgan Stanley from Grupo Vita, which added 624 beds to the market, underline the interest of large investment funds. In this context, Spain continues to attract foreign capital—especially from North America and Europe—, which sees the student residence hall market as an opportunity to secure stable long-term returns.
Leading Investment in Europe
Spain has now firmly established itself as the primary recipient of investment in this segment at European level. In 2023, Spain secured €416 million via 13 transactions that brought 3,700 new beds to the market.
Such leadership is not new. During the 2018-2022 period, Spain accumulated 24% of the total European investment, with €3.51 bn invested in student residence halls. Such figures enhance the appeal of our cities as one of the most solid destinations for student property investment.
By location, Madrid (32%) and Barcelona (31%) accounted for almost two-thirds of investment. However, other cities such as Valencia and Seville are experiencing notable growth, reflecting investors’ interest in expanding their presence beyond their core markets.
Growth Opportunities and Prospects
Given investors’ expansion plans, investments in this segment are expected to continue to increase in the coming years. The need to upgrade infrastructure and the unmet demand for beds provide significant opportunities for investors seeking assets with long-term growth potential. In this regard, we find a large untapped potential for growth and solid prospects for quality assets.
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