Spain has long been a destination for tourists and students alike, and its appeal is only growing. The number of students in the country has been rising steadily with a strong growth in the number of international students, both study abroad and full-degree seeking: a boon for a country with an aging population. As such, there has been growing interest from student housing providers, municipalities, and higher education institutions alike on how to best serve and leverage increased interest from these young, talented populations.
The Class of 2020 explored this topic and others with CBRE at its seventh and final regional session of the year in Madrid on September 11th.
Recent demand on student housing in Spain has changed dramatically. In a presentation by Samuel Toribio of Uniplaces, we learned that the number of students from Latin America was way up, with countries like Columbia, Peru and Ecuador now representing 10.2%, 6.2%, and 6.1% of international students in Spain respectively. This is in large part due to cultural legacies of Spain in Latin America, with language as no small measure. Moreover, contrary to what many might think, although Spain’s population is aging due to a chronically low birth-rate, the numbers of domestic students have also been on the rise. CBRE’s Graham Barnes shed light on this, explaining that there has been an increase in university participation by domestic students as well as a demographic break-from-tradition as younger Spanish people are more frequently choosing to live away from home than ever before.
This increase in the number of students together with a low supply of student specific beds (90.000 PBSA beds accounting for only 6% of the country’s student population), and an aging, fragmented stock has led to a growing student housing shortage in a number of cities across Spain. In some popular neighbourhoods of bottleneck cities like Barcelona and Madrid, average student room prices have passed €500/month. This is an issue as Spain, Spanish cities, and universities continue to try and attract ever more international talent, which is considered key by Jorge Sáinz, General Manager for Universities of the Spanish National Government, given Spain’s aging population.
In regard to attracting this talent, Dr. Alfonso Vegara, founder and honourary president of Fundación Metropoli, pointed out that talent attraction happens at the city-level, not the national-level. Talented younger populations require certain features which are best provided and enjoyed at more local levels (i.e. cultural and lifestyle amenities). To keep that talent in an area, Juan José Güemes, Chairman of IE University’s Entrepreneurship and Innovation Center, discussed the need for an economy that can support young graduates and the need to strengthen Spain’s talent ecosystem. Sáinz agreed, mentioning that connecting higher education to jobs, start-ups, and makerspaces is essential for Spain’s post-financial crisis economy.
Panel 1: City Strategies: how do we attract and retain young talent?
- Juan José Guemes, Chairman of Entrepreneurship & Innovation Center – IE Business School
- Jorge Sáinz González, General Manager for Universities – Spanish Government
- Alfonso Vegara, Founder and Honorary President – Fundación Metropoli
- José María García Gómez, General Manager for Housing and Refurbishment Affairs in the Comunidad de Madrid Government
Regarding producing more housing for growing student numbers, developers and operators in Spain find that there needs to be more flexibility from cities regarding accepting different operational models. Charlie MacGregor, CEO of The Student Hotel (TSH) explained that TSH doesn’t quite “tick a box” for a city given its hybrid model of student accommodation and hotel, and therefore runs into difficulty when working with municipalities like Barcelona. However, it is important that cities are open to different operational models according Carlos Cano, Commercial and Marketing Director at RESA, given that residences need to change accordingly with demand differences and that Spain needs different operators developing different products.
Chris Holloway, Director General of Nexo Residencias (now part of GSA since this past summer) explains that very often critical stakeholders at cities and universities seem unconvinced by modern models of student housing delivery. Nonetheless, interest in the Spanish market is growing.
Panel 2: student housing investment market: who is investing where, and what ae they investing in?
- Carlos Cano, Commercial and Marketing Director – RESA
- Chris Holloway, Director General – Nexo Residencias (GSA)
- Charlie MacGregor, Co-Founder and CEO – TSH
Like previous regional sessions, we have noticed a strong desire from both public and private parties to improve the relationship between stakeholders to more efficiently and effectively provide housing to the next generation of students. Part of the mission of The Class of 2020 is to bridge the divide between these stakeholders and facilitate a more productive dialogue to help develop more productive relationships. Given what we learned in Madrid, there is clearly work to be done but also clear desire on all sides to make it happen.
By Manu Moritz