Target Overview

EQT Exeter has successfully finalized the sale of a comprehensive portfolio consisting of 12 student housing assets across nine cities in Spain. This portfolio has expanded significantly since its creation in May 2021, growing from an initial two assets with 1,500 beds to a total of 4,100 beds. The portfolio caters primarily to domestic students and provides a high level of service and amenities at affordable prices. Notably, several buildings within this portfolio have achieved LEED Platinum certification, highlighting their commitment to sustainability.

Through a partnership with developer Grupo Moraval, EQT Exeter strategically aimed to create a premier selection of purpose-built student accommodation (PBSA) assets. The assets are strategically located in key cities like Madrid and Barcelona, as well as essential secondary higher education hubs such as Seville, Málaga, and Granada. Impressively, just two years into the joint venture, EQT Exeter's portfolio ascended to become the fourth largest student housing portfolio in Spain.

Industry Overview

The purpose-built student accommodation sector in Spain is witnessing robust growth, buoyed by strong economic expansion and a notable undersupply of quality student housing. The growing influx of domestic and international students seeking higher education within Spain continues to drive demand for premium accommodation options. This favorable trend positions Spain as a thriving market for real estate investment, especially in the thriving PBSA segment.

Moreover, Spain's educational landscape is adapting to the increasing internationalization of its universities, making the need for quality student housing more essential than ever. The demand for PBSA in Spanish cities is outpacing supply, creating a conducive environment for new investments in this sector. The combination of increased enrollment in higher education institutions and demographic changes strengthens the case for investments in student accommodation.

Investments in student housing are also seen as resilient, given their steady revenue streams. Historical data indicates that student accommodation has enduring demand, even in times of economic uncertainty, making it a viable option for real estate investors. This, paired with the enduring positive perception of student housing as a safe investment, further consolidates the market's appeal.

Rationale Behind the Deal

The rationale for the sale stems from the significant growth potential of the Spanish student housing market as it recovers from the pandemic. EQT Exeter's decision to sell its first student housing assets in Spain effectively capitalizes on the current trend of rising demand for high-quality accommodations.

Azora's acquisition reflects a strategic move to address the existing shortage of student housing in Spain and expand its portfolio in Southern Europe. The transaction not only allows EQT Exeter to realize value from its investment but also enables Azora to leverage well-positioned assets to support its ambitious growth targets.

Investor Information

Azora is a prominent real estate investment manager recognized for its strategic investment in various sectors, including residential and commercial real estate. After previously establishing and leading the largest PBSA portfolio in continental Europe, Azora is reentering the student housing market with intentions to expand its offerings across Southern Europe.

The company plans to utilize the newly acquired platform to develop a larger PBSA portfolio targeting an estimated 10,000 beds in key locations across Southern Europe. With extensive experience in the sector, Azora aims to capitalize on the growing demand for quality student housing by enhancing operational standards and expanding its geographic footprint.

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The transaction between EQT Exeter and Azora presents several promising attributes, making it a potentially favorable investment. The growing demand for student accommodation in Spain’s major cities aligns seamlessly with Azora's intentions to expand its PBSA offerings. This deal underscores the long-term viability of investing in student housing in a market characterized by a structural undersupply.

Furthermore, EQT Exeter's successful track record in managing and growing the portfolio indicates a well-structured investment strategy. The acquisition by Azora leverages this solid foundation, enhancing the chances for success as they aim for ambitious growth in bed capacity across Southern Europe.

In conclusion, the deal reflects a strategic alignment between EQT Exeter's investment goals and Azora's expansion plans. As the student housing market continues to thrive in Spain, this investment could lead to significant returns for Azora, establishing them once again as a leader in the PBSA sector.

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