Purpose-Built Student Accommodation (PBSA)

January 2026 Forecast

International students will continue to drive demand

Strong academic reputation, comparatively low tuition fees, and an increasing number of English-taught programmes positions Europe as a preferred destination for globally mobile students seeking value and quality. In particular, demand from Asia, Africa, and South America is expected to continue rising sharply, reinforcing the need for scalable PBSA solutions.

Midyear review

• Early figures for 2025-2026 from SIES indicate an increase of c. 5% in international students enrolled in French universities compared to the previous year. DAAD estimates a similar rise for German universities. These increases are in line with the QS forecast for Europe of 5% annual growth in international student enrolments to 2030. However, growth is not uniform across the continent. According to Nuffic, The Netherlands saw a slight fall year-on-year in international enrolments, albeit after many years of increases.
• Europe's top academic institutions continue to perform well in global rankings despite increased competition from Asia. Growth in the number of programmes taught in English also positions Continental Europe for increasing its numbers of non-EU students moving forward. A DAAD survey finds that German universities intend to expand English-taught programmes in the year ahead. These trends should support PBSA demand, with more operators adapting their services to a diverse global intake.

January 2026 Forecast

Undersupply will support occupancy and rental growth

Structural undersupply of student housing will continue to underpin high occupancy levels and sustained rental growth across core European markets such as Germany, France, and Spain. Owners and operators will also focus on operational efficiency to drive Net Operating Income (NOI) growth, through improving energy efficiency and by implementing new technologies.

Midyear review

• Based on schemes currently in the pipeline, we estimate that new supply will increase the stock of PBSA units in Europe by 2.2% annually to 2028, with the highest growth in Southern Europe. This growth rate is below the forecasted increase in international students over the same period, although domestic student numbers might not rise in some countries.
• Our latest estimates of provision rates show that the stock of PBSA remains small relative to the size of the full-time student population in many markets, signalling structural undersupply for markets that are maturing. While the UK is relatively mature already, with a provision rate of c. 35%, the provision rate for Continental Europe in aggregate is below 15%. However, dynamics differ at a city level and therefore careful selection of locations will be vital for sustainable occupancy and operating performance.

January 2026 Forecast

Platform creation will lead to further consolidation

As the PBSA sector in Europe evolves, the emergence of market-leading operators and platforms will continue. This is driving consolidation in markets that are currently highly fragmented. We expect investors and large-scale operators to focus on those markets with enduring student demand, anchored by top-ranked universities.

Midyear review

• Large-scale platforms have continued to expand through the first half of the year despite a challenging economic backdrop, taking advantage of student demand in markets such as Italy and Spain. Global institutional capital remains an active driver of this expansion and consolidation, not only in Southern Europe, but also in more established markets such as Germany. This trend is evidenced by a steady flow of acquisition and financing announcements throughout the first half of 2026.
• Nonetheless, the landscape in Continental Europe remains highly fragmented; seven of the ten largest platforms (by number of beds) operate in the UK and Ireland. This indicates that the evolution of the PBSA sector will take time, but opportunities to create and scale platforms should remain for the foreseeable future.

H2 2026 Outlook

Momentum to be maintained during the rest of 2026

PBSA continues to attract capital for investment and development. International students attending European universities are a key source of demand for modern, professionally managed accommodation, but the supply of such accommodation is limited in many markets. Reflecting this, capital flowing into PBSA has risen notably on a trailing 12-month basis in countries such as France, Italy, and Spain. We anticipate that this trend will be maintained during the rest of the year, with activity supported by availability of debt. The 2026 CBRE Lender Intentions Survey recorded continued appetite from lenders to finance PBSA development, especially among non-bank lenders. Modernisation of the PBSA stock in more mature markets offers additional opportunities, but some markets such as the UK have faced headwinds. This reinforces our view that, in all markets, careful selection of locations and operating partners is essential for successful deployment.

Higher stock growth in markets with low provision rates

Increased investment is translating into expansion of the PBSA stock over the three years to 2028. We estimate the growth rate to be 2.2% for Europe overall and 2% per annum across the main markets in Continental Europe. The expansion in stock is unevenly distributed, which reflects factors such as the existing scale and maturity of each market, and expected growth in student demand. Analysis of schemes in the pipeline suggests that France, Spain, and Italy will see larger increases in the number of PBSA units over the next three years, while Portugal, Italy, and Spain will see the highest increases relative to existing stock. To understand the implications for operating performance in new and existing schemes, the pipeline must be compared to the current rate of PBSA provision in each country. This comparison shows that the strongest growth in new supply is occurring in nations where existing PBSA stock is small relative to the full-time student population. Therefore, these increases are not expected to close the structural demand gap, although individual scheme success will inevitably depend on how well the product caters to local demand.

Figure 6: Estimated provision rates and expected growth in PBSA stock