Home PBSA/Institutional Landlords PBSA in Major International Student Destinations

PBSA in Major International Student Destinations

by Joe Green

Purpose Built Student Accommodation (PBSA) is housing specifically designed and built for students by private developers. PBSA buildings are generally made up of a combination of studio apartments, cluster flats, en-suite and non-ensuite rooms. Newer PBSA buildings tend to cater to the higher end of the market, with onsite facilities such as gyms and cinema rooms. International students are more likely to choose to reside in PBSA. It is all the more important that PBSA’s understand about the most popular international student destinations.

Four of the largest international study destinations are the USA, Australia, the UK and Canada. The PBSA markets in these countries vary in both size and maturity, however their prospects for the future appear to be good.


The USA has the largest international student population in the world, and therefore has the biggest student housing market. Over one million international students choose the USA as a study destination which, along with large numbers of home students, enables the student housing market to continue to expand. 

The USA is a popular market for investors also, as it is able to offer the scale and stability required for their investments which is not yet present in locations such as Australia and Canada. This investment demand creates the market conditions for price growth and development. There has been over 260,000 new PBSA beds completed since 2014.

Despite increasing development, the US PBSA market has achieved strong price-per-bed growth, peaking at $226,500 in 2018, increasing by 71% since 2014. Currently only 12% of students are able to find a space in a PBSA meaning that development is likely to continue, along with investment from international investors seeking stable returns. The USA is most definitely one of the biggest international student destinations.


Australia has a large international student population, which is increasing rapidly. However the PBSA market is not mature, and is likened to the UK market in 2006. In the key cities of Sydney and Melbourne there is an estimated deficit of just under 140,000 student beds. The Australian PBSA market is more reliant on international students than most, as 55% of PBSA is occupied by international students.

The market lends itself more towards investment by development rather than acquisition, as property owners prefer to keep their assets to benefit from the growing market. Despite the recent development surge, the increasing student population, particularly from abroad, means no progress will be made in shortening the supply deficit.


The PBSA market in Canada is currently underdeveloped, with only 3% of students being able to reside in a student only building compared to 12% in the UK. This puts pressure on the private rental sector, leading to popular university cities of Toronto and Vancouver being among the most expensive cities to live in in the world. 

Investors in Canada have focussed on the traditional markets such as office and retail, due to the lack of scale within the PBSA market. This in turn limits the amount of market evidence which also limits investor interest. The lack of investment and development has led to an estimated student bed deficit of 416,000. Development costs and planning restrictions in city centre locations has also inhibited development in the areas where it is needed most. 

Institutional investors are beginning to enter the market which was a major event in the US market when it occurred a number of years ago. It was at this point that the market began to rapidly expand. Furthermore planning regulations have recently started to be changed to foster more PBSA development, as are sources of finance. Canadian based investors have shown their willingness to invest in PBSA, but cannot find the required scale in Canada. PWC expect PBSA to outperform other major sectors in coming years. This would suggest that PBSA’s will shine in international student destinations like Canada.


The UK currently has the second largest international student population in the world, with over 500,000. This has helped make the UK PBSA market the most mature. It benefits from very low risk and provides investors with very stable returns. There are currently around 650,000 PBSA beds in the UK, with further development planned for the coming years.

The 130% growth in development of studio apartments over the past four years appears to have halted, with students now demand more affordable accommodation, leading to rent higher rent growth for en-suite and no en-suite rooms. There was on average a 2% rent growth across all room types. 

The increasing amount of both home and international students attending universities in the UK, drawn by the reputation of their education will ensure there is consistent demand for accommodation close to campus, however it is expected that affordability will now take precedence over high specification buildings.


Cushman and Wakefield. 2018. UK student accommodation market 2018/19. Accessed 30th May, 2019, from  uk student accommodation report – Cushman & Wakefieldwww.cushmanwakefield.com/…/reports/uk/Student%20Accommodation%20Report%

Knight Frank. 2019. UK PBSA sector to continue domination in 2019, says expert. Accessed 30th May, 2019, from https://thepienews.com/news/uk-pbsa-sector-to-continue-domination-in-2019-says-expert/ 

Knight Frank. 2018. Australian Student Housing 2018. Accessed 7th April, 2019, from https://www.knightfrank.co.uk/research/australian-student-housing-2018-5122.aspx

Knight Frank. 2016. Australian Purpose Built Student Accommodation 2016. Accessed 9th April, 2019, from https://content.knightfrank.com/research/1040/documents/en/resinsight160421b-3735.pdf 

Savills. 2018. Australian Student Market Report 2018. Accessed 7th April, 2019, from http://www.savills.com.au/publications-pdf/s2ht-studentaccomreport-oct18-fa-web.pdf

Urbis. 2018. Regional Student Accommodation Assessment. Accessed 9th April, 2019, from https://docs.education.gov.au/system/files/doc/other/regional_student_accommodation_analysis_report_final.pdf 

Real Page Analytics. 2019. Student Housing Performance Remains Stable. Accessed 3rd July, 2019, from https://www.realpage.com/analytics/student-housing-performance-remains-stable/ 

Real Page Analytics. 2019. Student Housing Draws Increased Interest from Investors. Accessed 3rd July, 2019, from https://www.realpage.com/analytics/student-housing-draws-increased-interest-investors/

CBIE. 2018. International Students In Canada. Accessed 28th March, 2019, from https://cbie.ca/wp-content/uploads/2018/09/International-Students-in-Canada-ENG.pdf 

Cushman and Wakefield. 2018. Student Housing in Canada: Is There Room in the Class for U.S. Investors?. Accessed 1st April, 2019, from http://blog.cushwake.com/americas/part-three-student-housing-in-canada-is-there-room-for-u-s-investors.html 

PWC. 2019. Emerging Trends in Real Estate US and Canada 2019. Accessed 29th MArch, 2019, from https://www.pwc.com/ca/en/real-estate/assets/p461421-emerging-trends-in-real-estate-report-2019.pdf?utm_source=2019-etre-report&utm_medium=referral&utm_campaign=2019-emerging-trends-in-real-estate-report

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