Italian PBSA Snapshot | 2023
The Italian Purpose Built Student Accomodation Market Performance in 2023
- Francesca Fantuzzi
- Flavia Ferri
Key takeaways:
- Student housing is showing intrinsic growth potential
The student housing sector is emerging stronger, showing intrinsic growth potential. Increasing demand from both international and national students leads to rapid changes in rent trends.
- International students returning with occupational demand
The OECD predicts that the number of globally mobile students will increase to around 8 million by 2025, compared to 5 million in 2019. The growing middle class is driving demand for goods and services across various sectors, including higher education.
- Student accommodations remain an emerging asset class
In Italy, PBSA is a developing asset class, with great investment potential and geographic diversification. The supply of student accommodation in Italy falls significantly short (3.8% provision rate) in meeting the escalating demand from students. More mature European markets place themselves well into double digit provision rates.
In the first nine months of 2023, investments in PBSA across Continental Europe and the UK amounted to €3.6 billion. This figure represents a 49% decline from the previous year and a 41% decline from the five-year average. Q3 2023, however, has seen an increase compared to last year, with €1.7 billion invested. The UK leads in terms of investment, accounting for 72%, followed by France at 10% and Germany at 6%.
The future Student Housing supply in the main Italian cities will see over c.23,600 beds to be completed by 2027.
Compared to other EMEA countries, the supply of student accommodation in Italy falls significantly short in meeting the escalating demand from both international and national students. Italy and Portugal, in comparison to Denmark and the UK, show the most inadequate provision rates with a tenth of the latter's availability. This suggests promising prospects for investment growth potential in Italy, to fulfil the rising demand from students pursuing tertiary education outside their home cities and from abroad.
