PBSA in Europe a ‘clear winner’ in attracting foreign capital

Europe is a ‘clear winner’ when it comes to student housing, experts agreed at Real Asset Media’s ‘The Living Sector: transformation driving opportunity’ briefing, which was hosted by PwC at their London offices.

“Europe offers higher returns in undersupplied areas like PBSA”, said Rebekah Tobias, Co-founder & Managing Partner, Propela Ventures. “With so many international students coming to Europe there are real opportunities, especially in secondary markets.”

PBSA is at number three in Europe on investors’ list of prospects for 2026, according to PwC/ULI’s Emerging Trends in Real Estate Europe 2026. Student housing is fully institutionalised but still growing. In the UK it is a more mature market, but in Europe the supply/demand imbalance continues to grow.

“In parts of Continental Europe there are 10 to 15 students for every bed available and from an investment perspective rents continue to increase, giving an attractive inflation hedge”, said Gareth Lewis, Director, Real Estate M&A, PwC. “Student mobility is very sensitive to geopolitical events and currently Europe is a clear winner, also attracting students from the US.”

Spain, Italy and Poland have the lowest supply and offer the greatest growth potential, but there are opportunities across the Continent.

“Canadian investors are looking for diversification and they are bringing development and operational expertise to Europe, helping local partners to expand and scale”, said Tobias. “More North American money will come to Europe to get away from instability at home. We are already seeing a lot more deal flow and we will see more large transactions and more M&A.”

Interest is not confined to student housing but extends to other living segments like senior housing, which is attracting US REITs that have expertise in the sector and know how to deal with its operational challenges.

“Operational know-how and active management are now a must, but AI has changed the landscape”, said Tobias. “Operator can manage data more efficiently and they can build systems in-house with a small team.”

Regulations can be cumbersome in Europe compared to North America, and investors are aware of that, but they also know that they can achieve rental growth and double-digit returns even in a highly regulated environment.

“North American investors know that Europe is more regulated and they can deal with it”, said Tobias. “The real problem is unpredictability. The Netherlands has been highly regulated for years, for example, and investors are ok with that, as long as regulations don’t continually change.”

The family office network is particularly active, she said. A lot of institutional capital has been on the sidelines recently and private capital has taken advantage of this situation.