Student housing in Europe no longer niche investment – Hines

A new report from global real estate investor Hines shows that student housing in Europe is no longer a niche investment.

Student housing

The firm's research reveals that investment in purpose-built student accommodation (PBSA) has jumped significantly, from 1.9% of total European real estate investment in 2019 to 5.3% in 2024. This rapid growth, driven by high student demand and limited supply, has solidified PBSA as a mainstream and attractive asset class for global investors.
Strong investor confidence in European student housing stems from rising demand, both from domestic and international students, coupled with a shortage of high-quality accommodation. The appeal of European universities, boosted by more English-taught programs, has led to a 16.3% increase in international students since 2019.
Similar to trends in office and retail, students are seeking higher-quality housing. Top-ranked universities are experiencing the greatest surge in demand, leading to significant rent increases, especially in privately managed properties. These private accommodations command rent premiums of up to 15%, compared to around 6% for university-managed housing, particularly in markets with a larger international student presence.
David Steinbach, Global CIO at Hines, said: "Building and acquiring purpose-built student living schemes in our preferred markets is a high-conviction investment theme for Hines globally. The number of young people choosing higher education in Europe remains on a fast growth trajectory, and the undersupply of purpose-built student housing in cities with top universities is notable."
Joshua Scoville, global head of Research at Hines, added: "The European PBSA sector is a case study in how, with the right fundamentals and market conditions, a niche asset class can build momentum and become a high-conviction theme in a relatively short timeframe."
Hines' research shows rents for PBSA are climbing across major European markets, with some exceeding 10% year-over-year growth. Privately managed PBSA significantly outperforms university-managed housing in terms of rent premiums, especially in areas with high international student populations. While private PBSA commands premiums as high as 15%, university-run housing averages only around 6% above market rates.
Limited new construction and constrained overall rental supply further enhance the appeal of PBSA.