According to a recent analysis by Hines, published via PropTech Connect, investments in this sector have increased from just 1.9% of the total market in 2019 to 5.3% by the end of 2024.
This shift is far from coincidental; it is underpinned by strong fundamental trends. First, the growing number of international students in Europe—estimated to have risen by 16.3% since 2019—continues to drive demand for safe, affordable, and well-located student accommodation. Second, many new Purpose-Built Student Accommodation (PBSA) developments are aligned with modern environmental and social sustainability standards (ESG), making them especially attractive to institutional investors. Third, the asset class offers high-performance investment characteristics, with impressive occupancy rates and rental growth reaching 10% to 15% annually in some cases. Lastly, the sector is no longer viewed as niche or alternative; it has become part of the core investment strategy for major capital players such as Hines and Greystar, who are seeking long-term returns from stable, socially essential assets.
The rising investment interest in PBSA is also rooted in its unique combination of strong social impact and financial efficiency. Today’s students have higher expectations regarding quality of life, safety, community, and proximity to campuses. PBSA developments meet these expectations by offering fully equipped, sustainable, and functional living spaces. At the same time, they provide predictable and stable returns, which appeal to investors targeting long-term income and seeking alignment with ESG standards.
Furthermore, as many European cities face a significant shortfall in student housing, PBSA is emerging as a vital solution to improving access to higher education without placing additional strain on the broader housing market. Investments in this asset class also benefit from the broader regulatory framework for sustainable development, with many PBSA projects qualifying for green financing, tax incentives, or other subsidies—further enhancing their financial appeal.
