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Spain's student housing market is drawing strong global investor interest amid a surge in international enrolments and a shortage of purpose-built accommodation. International student numbers have risen 77% in the past decade, with just 117,000 purpose-built beds available for 622,000 students. Demand has sparked record deals, including CPP's €1.2 billion acquisition of Livensa, while U.S. developers Greystar and Hines expand portfolios. Premium housing blocks, charging over €1,000 monthly, cater largely to foreign students and operate under flexible service agreements, making them attractive to investors. While these projects face less backlash than tourist rentals, they underscore affordability challenges for Spanish students.
Global investors are increasingly targeting Spain's student housing market, drawn by the rapid growth of international students and a shortage of purpose-built accommodation. Cities such as Madrid and Barcelona have attracted significant interest from overseas developers and buyers, looking for returns that outpace inflation. Over the past decade, international student numbers in Spain have increased by 77%, highlighting a strong and sustained demand. Advertisement
Data from MSCI indicates that Spain is set for a record year in student housing sales. The market was notably boosted by Canadian pension fund CPP's €1.2 billion (USD 1.4 billion) purchase of Iberian student flats operator Livensa from Brookfield. Leading U.S. developers, including Greystar and Hines, confirmed they are actively expanding their Spanish portfolios. Hines has announced plans to develop 1,700 additional beds in Iberia after reporting 30% revenue growth in a Barcelona project in 2024.
According to Greystar's head of investment strategy in Europe, Spain is arguably the most landlord-friendly market on the continent. Currently, there are just 117,000 purpose-built student beds available for 622,000 students in need, meaning less than one-fifth of the demand is covered. For comparison, Britain offers purpose-built accommodation for roughly 30% of students. This imbalance has driven investors to prioritize premium flats, often exceeding €1,000 (USD 1,180) per month, which local students frequently cannot afford.
The student housing sector is less regulated than Spain's wider rental market, operating under service agreements rather than traditional leases. This allows rents to be adjusted more easily when students leave, making the market flexible and attractive to investors. Despite high rents, these new blocks have not sparked the same public backlash as short-term holiday rentals, which have previously triggered housing protests.
Students living in the new premium blocks report enhanced facilities but higher costs. German student Laura Teske pays €1,080 (USD 1,271) monthly for a room with a kitchen in a Madrid complex that offers a gym, pool, library, and rooftop terrace. The developer Stoneshield Capital has announced plans to double its portfolio of 10,000 student beds across Spain and Portugal. By contrast, Spanish student Jose Angel Martinez finds it difficult to secure housing for less than €500 (USD 590), noting that rents were about 40% cheaper five years ago.
Record tourism and immigration have widened the overall housing shortage to 400,000 homes, according to the Bank of Spain, while short-term rentals for tourists have grown 25% over the past two years. Spain?s appeal is further strengthened by lower tuition fees and more flexible migration policies than the U.S. and other European countries. A third of the more than 150,000 international students in Spain now attend private universities, attracting wealthier foreign students. Nine in ten students at business schools such as IESE and IE are from abroad.
American student Claire Zeng, studying at Barcelona's IESE Business School, described the city as comparatively affordable versus Los Angeles, New York, and London. Some local students, however, like Irfati Urra, pay €1,200 (USD 1,410) for a central Madrid room, sharing space with foreign roommates. The trend highlights the growing divide between international students willing to pay premium rents and locals seeking affordable housing.
Source Reuters
5th Jun, 2025
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