More student dormitories are popping up in Spain as more and more students seek accommodation away from home

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MÁLAGA, Spain – David León Serrano, 21, was studying video game development and had a rather new experience for a Spaniard: he lived in student dormitories on the south coast of Spain, a five-hour drive from his parents’ home in Madrid.

Distance learning is a familiar experience in many parts of the world, but a relatively new phenomenon in southern Europe. In Spain, for example, according to the Spanish government, only around 17 percent of students receive their higher education outside of their home region. By comparison, US residents make up less than 20 percent of the student population in most states.

“I think young people are now beginning to understand that it is good for our development if we move at least in our own country,” said 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. “

His studio apartment with a kitchenette and bathroom costs 700 euros a month, paid for by his parents. The Malaga residence is one of 13 such student residences operated by Livensa Living, which is partially owned by Brookfield Asset Management in Toronto.

The increasing mobility of the Spanish student body is leading to an increase in investment in student dormitories, largely financed by foreign capital. Investors are also following the growing attractiveness of Spain for foreign students wishing to study there.

The sun and the outdoor lifestyle of Spain have helped make Spain the first choice for students participating in Erasmus +, the European Union’s university exchange program. Spain is also increasingly attracting Latin American students, especially those whose first language is Spanish, and is a popular choice for participants in US study abroad programs.

Life on campus was mothballed by the pandemic for much of 2020, but students have returned in large numbers, particularly eager to enjoy the communal lifestyle they missed while much of the world was locked. Real estate investors have followed suit.

In Malaga, for example, the number of beds in student dormitories rose by almost 50 percent in the past year, according to a study published in September by the real estate services company JLL. To underline the recovery, new investments in the industry reached 140 million euros in the first half of 2021, an increase of 140 percent compared to the previous year.

Real estate investors are entering a Spanish student housing market that is not only in short supply, but also in urgent need of renovation.

Catholic orders have long dominated the student dormitory market in Spain and still make up around half of the beds. But these Catholic residences rarely have the gyms, movie theaters, and other facilities that the current generation of students has come to expect, and many also enforce conservative rules, including to ensure that male and female students live separately. And at a time when the Spanish Catholic Church is struggling to attract its own new generation of nuns and priests, it is also facing a staff shortage in its residences.

“I think that all religious orders could run out of staff in the next ten years,” said Álvaro Soto de Scals, managing director of Grupo Moraval, a Spanish developer who specializes in the construction of student dormitories, including for Livensa. In May, Moraval set up a joint venture with EQT Exeter from Sweden to invest 500 million euros in student dormitories in Spain.

On the other hand, “the mobility of students and the appetite for better education are increasing,” said Soto de Scals.

One reason for the lower student mobility in Spain is “a very strong parental culture, especially when compared to my experience in the UK, where you are pretty much expected to find a place to live by the age of 18,” said Amber Banks-Smith. the British Deputy Head of the Livensa Student Residence in Málaga. In fact, the parents pay the rent and do other administrative matters on behalf of most of the students, she said.

Spanish lawmakers also make it easier for developers to get building permits for dormitories, not only to help students but also to provide housing for other residents in their crowded cities. The brain drain of students “is one way of relieving some of the pressure on the housing market,” said Soto de Scals.

Ashraf Bachiri, a Moroccan student, moved to Livensa’s new facility in Málaga last year after previously sharing an apartment with two other students in downtown Málaga. The cost of his studio in Livensa is twice what his father paid for the apartment in the city center, but “my father also thought that it was safer for me to have my own rooms and one well run place to live, “said Mr Bachiri. Livensa offers 24-hour surveillance around its premises, which is equipped with security cameras.

Spain has around 1.6 million students in its universities. There are about 100,000 beds in student dormitories, a shortage of about 450,000 needed beds, according to the JLL study. Even if the pace of residential construction picks up, the gap is expected to grow in the next ten years, as the number of students in need of housing is likely to rise even more.

“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 are also contributing to growth, he said, “what is driving demand most is the increased mobility of students within Spain.”

In addition to Brookfield Asset Management, several other foreign investors have come to Spain. The largest Spanish student residence provider, Resa, was bought by the French insurance company Axa and CBRE Investment Management in New York in 2017. Student Experience, a Dutch company funded by Rinkelberg Capital, has announced five projects in Spain with a total of around 5,000 beds, including one in Pozuelo de Alarcón, near Madrid, which was approved by local authorities in May.

Xior, a Belgian company, has been investing in student dormitories in Barcelona and Madrid since 2019 and now has 15 percent of its portfolio in Spain. It is largely being built from scratch, but in September Xior won a contract to convert a former army barracks into a student residence in central Zaragoza, a Spanish city that has long been a training ground for the country’s military.

Xior focused on Spain, as well as neighboring Portugal, because it found that “what was on offer was really limited and out of date,” said Christian Teunissen, the company’s CEO. Both countries are currently experiencing a “major supply shift” fueled by the demand for safer student dormitories with better amenities than older city apartments.

As a student, recalls Mr. Teunissen, “we just wanted to have fun” in a student building without worrying about issues such as fire protection infrastructure. But he added that today’s students “want to check into a proper apartment, they want more luxury, and even shared bathrooms are no longer okay.”

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