Beyond Destination Marketing: Finding The Glocal Balance
Current developments in Spain call for a new ‘glocal’ balance between an ever-growing number of international students, an over-crowded housing market, local civic culture and the impact of heavy tourism in Spanish cities. Universities have been witnessing a steady increase in university participation by both domestic and international students, and not only because of the great quality of life. Together with an obsolete, fragmented housing stock, this has led to a growing student housing shortage in a number of cities across Spain. Meanwhile, cities and universities continue to try and attract ever more international talent to balance out an aging population and boost local economies.
As such, there has been growing interest from student housing providers, municipalities, and higher education institutions on how to best serve and leverage increased interest from these young, talented populations. Spain’s PBSA market witnessed the first major portfolio transactions last year, a remarkable development in a market characterized by under-provision and few professional operators. Developers adapt residences to local dynamics and characteristics by, for example, having high quality meal options and pastoral care included. Among those developing modern, integrated residences in the major cities there is growing focus on international students.
What are the expectations of internationalization in the future and how can the city leverage international students? How can the city balance international students and tourists, while being mindful of the needs of local residents and the livability of the city?
Five Top Learnings
- Sovereign wealth funds are quickly growing their investments in PBSA from a 4 per cent share in 2011, to more than 15 per cent in 2016, which helps consolidating student housing as an asset class.
Investments in Spain are obviously in Barcelona and Madrid, but increasingly the concept of Tier 2 and 3 cities is blurring. Strong international universities make even smaller cities interesting destinations.
In terms of finding the glocal balance for the increased pressure on cites, caused by (educational) tourists and international students, strong ties between housing operators, universities and local civic initiatives are seen to be key.
- Professional student accommodation can actually contribute by peak shaving, when local regulations become more flexible in allowing to mix students and tourists in different seasons.
- From an operators’ perspective in Iberia the focus is increasingly on student experience and hospitality, especially in regards to the very caring families that want to make sure their kids are taken care of.
This panel will explore a new ‘glocal’ balance between an ever-growing number of international students, an over-crowded housing market, local civic culture and the impact of heavy tourism in Spanish cities. How can the city balance international students and tourists, while being mindful of the needs of local residents and the livability of the city? What does internationalization of higher education currently look like in Spain, and what can we expect in the future?
This panel discussion focused on the hard investments into PBSA in Spain: major new projects and transactions, yields/ROIs, demand-supply imbalances, differences in investment interest by location, shifting student demands and product type.