Italian PBSA Snapshot | Q3 2024
The Italian Purpose Built Student Accomodation Market Performance in 2024
- Francesca Fantuzzi
- Flavia Ferri
Key takeaways:
- Student housing is showing intrinsic growth potential
The student housing sector shows intrinsic growth potential as increasing demand from both international and domestic students outpaces current PBSA supply. This imbalance sparked unprecedented investment interest, with Italy witnessing its highest-ever PBSA investment in 2023, reaching nearly €300 million (37% of all living investment). 2024 also saw investments in several locations throughout the country, including Rome, Padua, Turin, Florence, Milan and Bologna.
- International students returning with occupational demand
Italy is experiencing a strong upward trend in international students, with growth accelerating in recent years. The increasing share of international students in the total student population suggests that the growth rate of international students is outpacing that of domestic students, potentially due to factors such as improved international programs, better marketing, and changes in global education patterns. Based on historical trends, the number of foreign students in Italy will increase by 68% by 2028.
- Student accommodation remains an emerging asset class
In Italy, PBSA is a developing asset class with great investment potential and geographic diversification opportunities, driven by a fundamentally undersupplied student housing market. With a current provision rate of 4% compared to the European average of 14%, Italy offers substantial growth prospects. By 2028, only Milan is projected to approach a 10% provision rate, while other cities, including Rome at around 3%, lag behind, underscoring the market's nascent stage and the diverse opportunities across various urban centers.
- Milan: dominant PBSA growth and development outlook
Milan stands at the forefront of Italy's PBSA expansion, boasting a significantly larger supply pipeline compared to other cities. While the city is experiencing some urban planning uncertainties, creating a temporary stall in development processes, Milan's enduring attractiveness to students continues to drive demand for PBSA.
