Colonial SFL and Vita Group have established a joint venture, equally owned by both companies, to invest in student accommodation and flex living, with an initial portfolio of three assets in Madrid to be progressively incorporated by 2028.
The portfolio will comprise more than 2,200 beds and 92,000 sqm, with a long-term stabilised value estimated at around €1 billion.
The platform will bring together Vita Student Oria South, which opened in September 2026; Oria North, which is expected to be contributed in 2027; and Santa Hortensia, an office building owned by Colonial that will be converted and delivered in 2028.
The structure will allow the portfolio to be expanded through future acquisitions and the addition of third-party capital. Vita will contribute its expertise in the development, marketing and management of student accommodation, while Colonial will provide its investment and urban asset transformation capabilities.
Oria South will start generating rental income following the launch of the joint venture, pending the integration of the other two assets.
The inclusion of Santa Hortensia changes the strategy initially planned for one of Colonial’s Alpha X projects. Taking into account the development CapEx already planned, the SOCIMI estimates an unlevered IRR of close to 10% over seven years and a return on cost of more than 6%, without increasing the investment allocated to its conversion.
According to Colonial’s estimates, the transaction will have a positive impact on EPRA earnings and EPRA NTA. The progressive incorporation of the assets and the possibility of bringing in new investors are also expected to improve EPRA LTV over the medium term.
Pere Viñolas, CEO of Colonial SFL, said the partnership will allow the company to anticipate the value creation from Santa Hortensia before the development is completed, while reducing the asset’s commercial risk. The structure also leaves room for future institutional capital and further growth opportunities.
The initial investment is focused on Madrid, where there are eight purpose-built student accommodation beds per 100 students, compared with a European average of 13. The joint venture is intended to expand to other European capitals and university cities in the future.
