PBSA sector closes another strong year
The PBSA sector has registered another strong year with occupancy rates and rents rising, according to the newly released Student Housing Annual Report by Bonard. While soaring inflation, interest rates and rising costs in the last quarter of 2022 have slowed down investment transactions, the overall outlook is positive and experts expect the sector to keep growing in the next two years.
Growth will be driven by increased demand, especially from international students – and in some locations, supply will actually struggle to keep up with demand. According to the report, occupancy rates hovered between 95 to 99% in Europe, while the average rent for a studio has reached €946 a month.
Porto, Barcelona and Seville top the charts for the biggest construction pipeline, while Greater London and Greater Paris have the highest number of projects under construction.
Bonard CEO Samuel Vetrak said: “The PBSA sector was affected in 2022 by the macroeconomic conditions, but less so than other asset classes. In 2023, we can see even greater institutional capital demand for this asset class. Q4 2022 was a transition and adaptation quarter. Still, occupancy is high and rents are growing – in some countries 20% or 30% more than the year before. On the other hand, interest rates are expected to keep increasing slightly in 2023. And while development costs have stabilised, what has not changed is the cost of land. Some investors are waiting for a correction on that front.”