Europe is experiencing a surge of interest from both real estate investors and international students, making it the ideal destination for operators and developers in the student housing sector. The latest data from Bonard has highlighted the drivers behind Europe's rise as the destination of choice for students and investors.
With institutional capital now backing the asset class, the sector has a great opportunity to grow and consolidate.
“We see from data and conversations that Europe combines strong and growing demand, chronic undersupply, maturing portfolio landscapes and resilient returns; those factors combined are the reason why investors are more and more interested in the student housing sector in Europe,” explained Martin Varga, Chief Growth Officer at Bonard.
Student numbers in Europe are expected to continue growing in the coming years as changes to visa policy and regulations shift student flows away from other study destinations.
Rents are climbing faster each year in most countries. The average growth across the EU was 3.7% in 2022, but it reached 5.2% in 2024. Thanks to strong demand, occupancy rates remained close to 100% in most student cities.
“The continent is very friendly and receptive to international students. It offers quality universities and accommodation options at a competitive price. Also, some countries are doing very good homework, removing barriers for international students,” added Juan Manuel Acosta, CIO at Rockfield Real Estate.
Across the continent, the supply and demand gap is expected to remain wide in the next decade, highlighting the ongoing potential the sector offers to investors and developers. Europe has, on average, a 14% provision rate, a fraction of the 54% maximum saturation rate calculated for this market. Popular countries like Spain and Italy have particularly low provision rates – 8% and 5% respectively.
Finally, while transaction activity was generally quieter in 2024, this year has already seen several sizeable transactions, including the Livensa Living acquisition by Nido Living and CPP Investments for €1.2 billion.
As Europe continues to build its reputation as an international student hub, awareness is growing that student housing is central not just to its ambitions as a study destination, but also to its overall economic prosperity.
