Insights into Student Accommodation: PBSA Landscape of Europe, Australia, and Canada

The student housing demand is on the rise, affecting thousands of students across Europe, Australia and Canada. Bonard’s Student Housing Annual Report 2023 is a milestone in understanding the changing landscape of purpose-built Student Accommodation (PBSA) around the world. With in-depth research and analysis by Bonard’s expert team, this annual report provides valuable insights into the state of affairs in the student housing industry, including trends, challenges and opportunities. By monitoring key data points like demand, market saturation and investment trends, this report provides stakeholders with an in-depth view of the PBSA environment. 
As the global demand for high-quality student accommodation continues to grow, this report is a must-read for investors, developers, universities and policymakers looking to navigate and benefit from this dynamic market. Bonard is committed to providing accurate and insightful information that will continue to guide strategic decisions and drive innovation in student accommodation developments and management.‍

Rise in Rent

Rent levels have consistently increased across all PBSA products over the last five years. Operators’ capacity to change rents multiple times without experiencing occupancy loss is a key factor that has enabled PBSA real estate to recover from the effects of inflation and the energy crises and become more resilient than ever before. This trend is getting unabated.
In fact, according to BONARD research in 2023, rent increases were the highest since 2018. Rent levels increased more than in 2022 by region and in tier cities. The average increase for single studio rooms in private PBSAs with private bathrooms and kitchens reached 9.2% in 2023. Canada saw the largest rent increase of 15% in the sector, while the UK followed with a 12.9% increase. Across Continental Europe, average monthly rents increased by an annual average of 5.4% compared to 2022, with above-average increases in Poland (17%) and Austria (10%) showing an above-average growth.

Source: Bonard, 2023

Given the average inflation rate of approximately 7.4%, the student housing sector was able to raise rent levels above the inflation rate. According to BONARD research, rent increases did not have a significant impact on demand or occupancy rates, both of which remained high. Rising rents for the student accommodation market are not a short-term phenomenon. In a market where supply is limited and demand is increasing, rents are likely to continue to rise in the near future.

Occupancy Rates

After a slight dip in the first half of 2021/22, occupancy rates quickly returned to pre-COVID levels in 2022/23 before stabilising in the second half of 2023/24. According to the Bonard survey, accommodations were almost fully booked in September 2023 across all the countries. Recording the occupancy rates ranging between 96% and 99%. Austria had the lowest occupancy rate, at 96%, compared with 95% in 2022. Occupancy rates were stable across the United Kingdom and Continental Europe despite sharp increases in rent, with no change in most countries compared to 2022.

Supply of PBSA Beds in 2023

In 2023, PBSA completed 214 news buildings across 121 cities, bringing the total number of new beds delivered to 61,386. Greater Paris delivered the highest number of beds, with 4,634 new beds in 2023 across 12 buildings, while Madrid had the second-highest number of new beds i.e. 3182 in 8 buildings. In Amsterdam, 10 new buildings were delivered in 2023.
Top student cities with world-class education institutions naturally have the highest share of new PBSA projects. As per BONARD’s research, Madrid, Berlin, Greater Paris, and Amsterdam, for example, had an impressive number of new developments in 2022 and 2023 (8+ new homes per city per year), while other popular student cities, like Copenhagen and Barcelona, experienced a slowdown in 2023, with only 1 new asset per city.

Transaction Value

After recording a record-breaking number of transactions in 2022, the market experienced a significant slowdown in 2023. This is unsurprising, given the macroeconomic context in which the market is operating. The total number of transactions almost halved in 2023, falling to 50, compared to 90 in 2022. Across Continental Europe, 30 deals were concluded, resulting in a transaction volume of 1.2 billion euros, down from 1.7 billion euros in 2022, while 20 deals were concluded in the UK, resulting in a volume of 1.6 billion euros, down from 1.8 billion euros in 2022. The total transaction volume from the UK and Europe continental was € 2.9 Bn in 2023.

It is important to note, however, that there was a lack of publicly available data on the deals concluded in 2023. Therefore, it is reasonable to believe that the actual number of deals completed in 2023 could be higher. The average deal price per bed has been trending upward in recent years.

Investors Interest Survey

Bonard conducted the survey on Student Housing investor Intentions in 2023. The purpose of the survey was to gain stakeholder insight into the student housing market outlook, which is critical for accurately gauging student housing investor interest in 2024 and subsequent years. The survey ran from November 2023 to January 2024. 
BONARD collected 120 responses from investors, operators and developers, banks and other sectoral stakeholders, covering 300,000 beds and 80 billion euros of investment worldwide. In 2024, 60% of respondents plan to invest over 11% more in student housing in comparison to 2023.‍

Below are some insights from the survey-

How do you expect investment in student housing to change in 2024 compared to last year?

Source: Bonard, 2023

What are your student housing investment plans for 2024, and how do they compare to the last year?

Source: Bonard, 2023

Largest PBSA Portfolios in Europe

(as per publicly available source)

In conclusion, Bonard student housing annual report 2023 underscore the need for urgent action to tackle the growing student housing need in Europe, Australia and Canada. Understanding the drivers of student housing needs, effective policies, and innovative solutions can help stakeholders mitigate the impact on students and provide affordable and appropriate housing options. Governments, universities and private sector players need to work together proactively to reduce stress for students and create an environment conducive to academic achievement and personal growth.

Amber is a global student housing solution provider. It helps you to book your  student housing in advance to escape to the student housing crunch on going in your desired location. Also, found what you read useful? Visit amber news for global student news and more information. Keep reading!