London tops European ranking for PBSA investment

London is Europe’s most attractive city for purpose-built student accommodation investment, according to Patrizia’s Student City Index report. Paris and Berlin follow in second and third places, respectively. The research, which analyses more than 180 university cities across 21 European countries, intended to move towards a “granular and city-level approach to effectively calibrate risk and return”. The global investor told Estates Gazette in March 2025 that it intended to invest £300m into a London-based student strategy. It will buy prime sites in London and other key Russell Group cities to develop high-grade student schemes, each of which will comprise 350-400 beds. “Student housing is fast becoming a cornerstone of institutional living strategies,” said Antonio Marin-Bataller, head of investment management living at Patrizia. “This research supports smarter capital deployment by highlighting where strong fundamentals align with liquidity, and why a city-by-city lens is critical for success in this dynamic market.” London’s market leadership London’s position at the top of the ranking was attributed to its appeal among international students, robust institutional depth, and long-term rental resilience. It also underscores the growing institutionalisation of the PBSA sector, which is increasingly seen as a defensive asset class amid broader market uncertainty. The index identifies six UK cities in the top 20, with nine classified as “prime-established” markets, including Manchester, Bristol and Edinburgh. This affirms the UK’s dominant role in the sector. A continental shift in strategy Explosive growth in European student numbers over the past decade has outpaced the supply of dedicated accommodation, leading to what Patrizia describes as a “broader and more diverse PBSA investment universe”. This evolution is prompting institutional investors to adopt a city-specific approach rather than a national or regional one. Marcus Cieleback, chief urban economist at Patrizia, said: “Institutional investors need more than macro-level guidance because PBSA performance is shaped by highly localised factors. Our index gives them a reliable framework to identify not just where the student population is growing, but where the conditions for sustainable investment returns are most favourable.” Europe’s top 10 PBSA investment cities The index’s top 10 cities for PBSA investment are: London (UK) – Europe’s leading PBSA market with unparalleled international student demand. Paris (France) – A blend of elite universities, deep student population, and constrained supply. Berlin (Germany) – Germany’s PBSA frontrunner, driven by innovation and liquidity. Vienna (Austria) – Affordable, high quality of life, and globally recognised education. Madrid (Spain) – Undersupplied yet vibrant, with attractive yields. Copenhagen (Denmark) – Strong rental growth and international appeal. Brussels (Belgium) – Multilingual, mobile student base and growing institutional interest. Stockholm (Sweden) – Increasing demand and highly educated demographics. Zurich (Switzerland) – Premium standards and strong international enrolment. Barcelona (Spain) – Established yet undersupplied and highly competitive. Additional high-ranking cities include Groningen, Munich, Lyon, Milan, Glasgow, and Cambridge, highlighting opportunities from global capitals to innovation-led university towns. Key market insights Germany: Berlin and Munich remain strong, while innovation hubs such as Darmstadt and Aachen show potential. France: Paris and Lyon lead, with cities such as Toulouse and Grenoble benefiting from deep student markets. Spain: Madrid, Barcelona, and Valencia rank in the “Top 50,” thanks to consistent demand and limited supply. Italy: Milan stands out as a “prime-established” market, with Rome and Bologna also ranking highly, though the broader market remains underpenetrated. Benelux: Amsterdam and Brussels shine among the top 20, with Eindhoven, Utrecht and Rotterdam offering emerging opportunities. Strategic framework for investors The index builds its rankings on three core pillars: Demographics: Student population, internationalisation, and age profile Gravitas: Academic reputation, career prospects, and quality of life Market structure: Supply levels, pipeline saturation, and liquidity Cities are then grouped into five investment clusters — prime-established, dynamic, prime-potential, liquid, and emerging markets —allowing investors to align strategies with their risk-return profile. Capital commitment and future outlook With PBSA continuing to offer higher yields and dynamic rental growth than traditional residential assets, Patrizia is doubling down on the opportunity. The firm is currently raising €1bn for its TransEuropean Living fund, targeting PBSA alongside single-family and multifamily housing, capitalising on what it calls Europe’s “chronic housebuilding shortfall”. Patrizia already manages €16bn (£13.4bn) of living assets, further cementing its role as a major player in alternative residential real estate. As global trends in urbanisation, international mobility, and higher education demand intensify, PBSA is set to remain a compelling institutional strategy. The Student City Index underscores this, providing investors with a roadmap to navigate an increasingly sophisticated and opportunity-rich landscape.