However, as the sector has scaled and capital has flowed in, the factors driving performance have become more nuanced and increasingly location-specific. While these dynamics remain intact, the narrative in 2025 has shifted. What was once a relatively homogenous investment category is now revealing deeper segmentation, as location, institutional quality, and operational performance shape outcomes more sharply. 

The 2025 letting cycle has been telling. In markets with globally ranked universities and limited supply, assets have leased strongly, achieving both full occupancy and rental growth. In others, occupancy has slipped into the 60–70% range, a meaningful departure from the consistency that PBSA has historically delivered. This is not a simple demand contraction; rather, it reflects demand reallocation. Students are making more deliberate choices, prioritising academic quality, affordability, and lifestyle factors. In effect, they are becoming more discerning, and the market is responding accordingly. 

London continues to stand apart. With its depth of institutions, global connectivity, and chronic undersupply, the city remains insulated from many of the headwinds affecting other locations. It draws consistent international demand, particularly from China and India, and continues to absorb new stock without distorting fundamentals. For this reason, a significant portion of our PBSA lending activity at Maslow Capital, part of Arrow Global, has been concentrated in the capital, reflecting our view that London remains a core market for long-term allocation. Other high-tariff university cities such as Oxford, Cambridge, Bristol, Edinburgh, and Manchester have also demonstrated resilient performance, underpinned by strong institutional reputations and global brand recognition. By contrast, some regional cities with mid- or lower-ranked institutions are showing signs of stress, where post-COVID supply growth has outpaced demand, and affordability pressures are weighing on occupancy and performance.

Read the full ‘Thought Leadership’ article at the link below