London, United Kingdom: Student housing investors are not just staying in the game, they are preparing to nearly double their stake. According to the 2026 European Purpose-Built Student Accommodation (PBSA) Investment Barometer, conducted by The Class Foundation and Savills, investors and operators with portfolios of over 107,000 beds across Europe, valued at c.€18.1bn, expect to increase their beds by 93% over the next two to five years. That would take the total to over 205,000 beds and deploy a further €15.8bn of capital.
For the second year running, Southern Europe tops the agenda. Spain (15%) and Italy (13%) are ranked as the most sought-after locations, with a further 8% considering Portugal. These markets have very low provision rates and rising international student numbers, which puts pressure on existing PBSA and underpins the need for more. The attention is showing in deals: over the first nine months of the year, Southern Europe accounted for 27% of total investment in European PBSA, the highest level on record.
The UK (13%) has climbed back up the priority list after ranking only joint sixth in 2025, partly because investors that have built sizeable platforms in Europe now want to enter the UK for the first time. Germany (11%) and France (8%) complete the top five. Both are among Europe's largest student markets and have recorded annual international student growth of over 3% over the past five years. Provision rates are higher than in some countries, but much of their publicly owned stock needs modernisation, creating room for modern, sustainable, purpose-built accommodation that better matches students' needs.
The source of that capital may shift. "European PBSA is expected to continue attracting global capital, although its sources may shift. North America accounted for close to two fifths of cross-border investment between 2021 and 2025. In our latest barometer, 63% of respondents are expecting to see an increase in capital from Asia Pacific. In terms of industry trends, the rise in prominence of AI is the biggest shift since last year's survey. AI is already changing the student booking journey, influencing how they find rooms and when they engage in the booking cycle. Moving forward, we expect the impacts to be further-reaching, including influencing investor and operator practices and margins." said Richard Valentine-Selsey, head of European living research and consultancy at Savills.
Collaboration will decide whether the ambition can be delivered. "Closer collaboration between investors, operators, universities and policymakers will be essential to balance investment viability with student affordability. Stable, predictable regulation gives investors greater confidence to commit capital, while public-private partnerships can help unlock sites and align accommodation with the latest sustainability standards and with student needs. The Class Foundation aims to provide a platform for this engagement, helping translate shared ambitions into practical solutions." said Jennifer Leach, managing director at The Class Foundation.
What the barometer leaves unsaid matters to investors and developers. The survey covers 19 respondents, equal to c.12% of all private PBSA beds in Europe, so it reflects stated ambitions rather than committed capital. It does not say how much of the €15.8bn is for development rather than acquisitions, or what yields and pricing investors are underwriting. On the release's figures, the extra capital works out at roughly €161,000 per additional bed against about €169,000 per existing bed, a calculation of ours that suggests investors expect to build or buy at similar values to today. The bigger question is whether enough sites, planning consents and affordable rents exist in Spain, Italy and Portugal to absorb nearly 98,000 new beds.
People mentioned
- Richard Valentine-Selsey, Head of European Living Research & Consultancy, Savills
- Jennifer Leach, Managing Director, The Class Foundation
Companies mentioned
- Savills, property adviser and co-author of the 2026 European PBSA Investment Barometer
- The Class Foundation, non-profit organisation and co-author of the 2026 European PBSA Investment Barometer
Image Source: Photo by Ryan Jacobson on Unsplash - for illustrative purposes only
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