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RESEARCH • January 2025
European PBSA 201:
Finding Distinction
European PBSA 201: Finding Distinction
European PBSA 201: Finding Distinction is the second paper in our PBSA trilogy, following European PBSA 101: Top of the Class which discusses why the sector makes for a compelling investment.
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Having set out the investment rationale in our paper, European PBSA 101: Top of the Class, the next step is to understand the relative merits of each potential market and determine favourable investment locations and assets.
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We use our three-step CLAS framework to determine the relevant trade-offs between locations and assets.
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Step I – Country. We assess six factors at a country level. The factors cover the size and growth of the domestically mobile and international student population, size and quality of the education sector, PBSA provision rates, local regulations affecting leases, and liquidity.
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Step II – Location. Our second step takes a similar set of parameters to Step I but with some adjustments for relevant city factors to analyse specific locations within target countries.
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Step III – Asset Specific. Finally we look at asset-level factors with an emphasis on operational efficiencies to determine the relative attractiveness of the asset.
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While some markets will be more attractive than others, our framework isn’t about determining must-have and no-go locations. Rather, it allows us to better understand the merits and risks that impact each location and asset in order to identify the risk-adjusted returns that best match investor requirements.
