Overseas property investors interested in diversifying from the usual holiday homes may be interested to hear that Spain has been pinpointed as a new target for the student property market, with the GSA group targeting the country as its next major international growth market.
The company purchased portfolios in the UK and Germany this month containing 4,600 student beds and 5,000 more under development and is looking to expand in Europe and the US.
A World Student Housing report published by property consultancy Savills cited 2015 as a record year for student property, following $15 billion worth of investment in the sector. During the first eight months of 2016, $8 billion was spent. However, there is still allegedly a shortage of student housing supply, with provision rates at just 24 per cent in the UK and a tiny 6 per cent in Spain.
The reason behind Spain’s unusually low rate is that there is a relatively small amount of international students studying in the country at just 75,000 in comparison to the average of between 300,000 and 400,000 in the UK or Germany. However, James Hanmer, a representative from Savills, argued that there was still opportunities for investment: ‘In Europe you are still getting that first-over advantage … there’s not much competition. But you are higher up the risk curve because it is not a product that is wholly proven in terms of demand.’
Founder and chairman of GSA, Nicholas Porter, cited as a Spain is a ‘good example’ of a market with potential for opening new purpose-built student accommodation. He said: ‘We like that market and the markets within. And ultimately our fight over the next two or three years will be to the US as well – bringing new product and new thinking to the US market. It’s not about being all over the US. It’s about being in major centres that continue to grow and attract both domestic and international students.’