Across Europe, there are limited PBSA rental regulations, with average rental growth increasing 11% over the past two years¹. The rental growth rate is even higher in acutely undersupplied markets such as Lisbon, Madrid and Milan where the number of students has surged and new PBSA stock is just becoming available. On a relative basis, given the combination of enhanced yield (see chart of European prime yields below) and higher growth versus other living sub-asset classes, PBSA is quickly solidifying its position as a key allocation for investors and ‘top of the class’ within the living sector. 

With investors increasingly focusing on the PBSA sector, Southern Europe is proving to be one of the most attractive destinations to deploy capital in Europe on a relative basis. Provision rates (beds per student), a key indicator of demand / supply dynamics in student accommodation markets, are materially lower across Southern Europe versus more mature markets such as the UK. PBSA provision rates are as low as 3% in Portugal, 4% in Italy and 8% in Spain whilst 13% across continental Europe and 33% in the UK. The unmet demand translates to a shortfall of >840k beds across Southern Europe².

_{1 European PBSA Investing in the Future (JLL, June 24)} 

_{2 JLL Research}

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