On Monday, EQT Exeter, the global commercial real estate arm of Swedish private equity real assets investor EQT, announced a new joint venture with an emphatic view on the forward-looking European demographics: specifically, student life in Spain. Through its second real estate fund, EQT Exeter will partner with Grupo Moraval, which currently holds 30 percent of the Spanish market for purpose-built student accommodation (PBSA) set for completion by 2022, to develop a portfolio of affordable, high-quality student housing units that it hopes will be ultimately valued at more than EUR 500 million ($611 million).
The venture, which marks EQT Exeter’s first-ever investment in Spain, has already secured two sites in Seville and Málaga.
“This joint venture with Grupo Moraval marks a landmark entrance into Spain for EQT Exeter. It is an example of our ‘business to consumer’ efforts which are focused on taking advantage of the demographic transformations that are occurring across Europe,” EQT Exeter Partner and Investment Adviser Rob Rackind said. “This strategy is manifesting itself through the delivery of over 8,000 beds across Europe over the next few years via a number of additional platforms that we have established. These include the delivery of a GBP 1 billion-plus private rented residential portfolio in Greater London, a EUR 400 million-plus mobility-impaired rental housing portfolio across France and a EUR 300m senior care portfolio in Northern Italy, all of which are expected to benefit from continued favorable supply-demand dynamics, urbanization and population growth.”
In announcing the partnership on Monday, EQT observed that Spain’s student housing market has grown rapidly, driven by demographic shifts that have seen a steadily growing number of 18-24 years old in Spain–this population segment has shown a sustained compound annualized growth rate of 5.7 percent since the 2015/2016 academic year, per EQT’s data–and increased demand for higher education from that segment. College towns in Spain have struggled to keep up with this demand.
“Students both nationally and internationally are increasingly seeking tailored, cost-efficient housing options and EQT Exeter and Moraval share the same vision on how to build and manage sustainable and digitally innovative accommodation for this segment,” said Grupo Moraval CEO Alvaro Soto.
The venture will initially focus on developing PBSA’s in Spanish college towns with rising demand for student housing and a relatively low provision rate (i.e., number of students that can be accommodated with current housing inventory), as identified and analyzed through Grupo Moraval’s in-house market intelligence platform and EQT’s digitization team. In Málaga, where some of the first 1,200 beds of the dormitory venture will be located (within the University of Málaga Teatinos campus), EQT notes that municipal authorities recently offered public land to establish two new universities.
Know This: Nodis
The JV’s assets will be let at market-rate rents under the newly created “Nodis” brand. Nodis expects to embody strong values of dynamism, vitality and safety in its operations. As such, the residences will be equipped with state-of-the-art facilities, high-quality amenities and premium services including but not limited to gyms, private lounges, living and gaming areas, libraries, work and study spaces, cinemas, parking, free high-speed internet and rooftop terraces.
Consistent with other EQT Exeter transactions, the JV’s assets will be developed with strong sustainability credentials and seek to achieve green certifications such as LEED (Leadership in Energy and Environmental Design) and GRESB (Global ESG Benchmark for Real Assets). The buildings will promote sustainable living practices and utilize photovoltaic panels on the roof, provide electric vehicle charging stations and spaces for carpool vehicles, use native or adapted plants which don’t require a permanent irrigation system and employ high efficiency- low consumption fixtures and fittings.
