RESEARCH • December 2024

European PBSA 101:

Top of the Class

European PBSA 101: Top of the Class

 

European PBSA 101: Top of the Class is the first paper in our three paper series on Purpose-Built Student Accommodation (PBSA). Here we set out why the European PBSA sector provides a compelling investment opportunity. 

  • There are more than 14 million students across Europe, yet only one-in-five domestically mobile or international students are able to access a PBSA bed. 

  • Underpinned by 70 universities ranked in the world’s top 250, Europe’s higher education sector benefits from supportive polices aimed at lifting attainment rates, along with a large domestically mobile student base and rising international student numbers.

  • Wider housing market shortages and growing demand for rental accommodation are also contributing to the growth in PBSA demand. With an undersupply of modern, high quality PBSA beds, favourable demand-supply dynamics are supportive of rental growth.

  • At the same time, lower volatility of returns means the sector offers investors strong risk-adjusted returns. 

  • Still in its infancy, the sector offers a scalable investment opportunity. Back of the envelope calculations suggest the size of the institutional market could triple from around EUR45 billion to over EUR155 billion.

  • There is also significant scope for increased liquidity. Despite having four-times as many students as the UK, average annual investment in European PBSA is only a little over half that of the UK. 

  • A lack of existing supply implies a significant funding opportunity, while a fragmented operator landscape and recent correction in pricing provides an attractive entry point for acquisition and/or consolidation opportunities to scale up. 

  • The sector is increasingly catching the eye of investors. In INREV’s 2025 Investor Intentions survey 67% of investors reported a preference for investing in European PBSA, well above the five-year average (35%) and up from 45% in INREV’s 2024 survey.

  • With strong demand-supply fundamentals and countercyclical characteristics, Europe’s PBSA sector represents a strong asset class, offering investors an attractive, scalable opportunity.

 

 

 

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