Chapter 4
Purpose-Built Student Accomodation (PBSA)
European Real Estate Market Outlook 2026
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5 Minute Read
International student growth will continue to drive demand
Demand for purpose-built student accommodation (PBSA) in Europe continues to experience significant growth, with international and domestic mobile students at the heart of this trend. Often with higher purchasing power, international students have and will continue to form a key part of the demand pool for PBSA product. The UK has historically been a leading global destination for international students. However, in recent years other major markets including Spain, Germany and France have seen a notable growth in international student numbers. Growth is set to continue, with international student enrolments in Europe forecast to grow by 5% annually to 2030, according to QS.
The appeal of Continental European universities will continue to be driven by factors such as the availability of English-taught programmes, quality of education and university rankings, post-graduate employability prospects, and affordability. Countries that successfully combine these will continue to be particularly attractive to international talent. This has been demonstrated by international student numbers in some of Europe's highest-ranked cities and institutions such as Berlin, Madrid and Milan.
The demographics of international students will also continue to evolve, with a projected rise in students from Asia, South America and Africa. This trend is evident in the UK, where non-EU students make up approximately 90% of the international student body. In response to these shifts, PBSA operators will increasingly tailor their sales strategies to cater to this diverse demographic, offering enhanced services such as multilingual customer support and relocation assistance.
An ongoing undersupply of student housing will ensure already high occupancy remains robust and underpin outsized rental growth.
Figure 4: Total number of students in higher education (thousands) and growth (%)
Note: United Kingdom and Belgium based on 2023/24 figures.
Trends to watch
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Continued undersupply
Structural undersupply of student housing will continue to underpin high occupancy levels and sustained rental growth across core European markets such as the UK, Germany, France and Spain.
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New source markets
While intra-European mobility remains stable, demand from Asia, Africa, and South America is expected to continue rising sharply, reinforcing the need for scalable PBSA solutions.
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Europe's growing appeal
The combination of comparatively low tuition fees, an increasing number of English taught programmes and strong academic reputation positions Europe as a preferred destination for globally mobile students seeking value and quality.
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Location selection
The PBSA sector continues to evolve in many European countries. Demand will remain strongest in markets anchored by top-ranked universities. Investors should focus development-led strategies in these key markets, to deliver defensive PBSA assets.
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Consolidation
The emergence of market-leading operators and platforms will continue, as currently highly fragmented markets begin to consolidate.
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Operational efficiency
Owners and operators will increasingly focus on operational efficiency, optimising OpEx through energy efficiency and implementing new technologies to drive Net Operating Income (NOI) growth. Installing sensors and metering systems in rooms to turn off heating and lighting when students are not present, for example, reduces utilities costs and optimises OpEx, thereby improve NOI.