Student Housing Market

Student Housing covers on-campus residence halls, private off-campus housing, and purpose-built student accommodation (PBSA) both by the public and private sectors. In fact, demand for student housing has been increasing rapidly as the number of people seeking higher education globally keeps rising because of factors like population growth, urbanization, and international student mobility.

In recent years, there has been a noticeable shift towards purpose-built student housing that provides modern amenities and more independent living conditions than traditional dormitories. These are often managed by private companies or educational institutions and are designed to be safe and supportive environments for students.

Market Demand: The demand in this market is expected to rise in the future due to students, especially foreign ones, seeking quality accommodations closer to their institutions. There will also be increases in the disposable incomes and rising interest in student internationalization while higher education expands to include more people all over the world. Students have, therefore, been made the focus of significant investments owing to stable demand and a long-term potential for rent.

Dynamic Insights

The growing middle-class population and rising disposable incomes have allowed more students to study abroad, thereby increasing demand for quality accommodations. Urbanization and the growth of educational institutions in major cities have further accelerated the need for PBSA. PBSA differs from traditional housing, offering modern amenities, safety, and a student-centric environment, making it an attractive choice for students and investors alike.

On the supply side, private developers and investors are entering the market in growing numbers to meet the demand gap with the available housing options. Affordability issues, high construction costs, and bureaucratic barriers in some regions might restrain growth in the market. Furthermore, the pandemic COVID-19 temporarily altered the market because lockdowns and shifting to online learning lowered the demand for physical housing. These notwithstanding, the market has picked up in recent weeks as on-campus classes resumed and international travel increased.

Drivers Insights

• Increasing International Student Enrollment

International student mobility has been seen as one of the emerging drivers of the global student housing market. For the past decade, countries such as the United States, United Kingdom, Canada, and Australia are preferred destinations for international students aiming to pursue higher education. Many millions of students are drawn to these countries for quality education, access to global opportunities, and improving living conditions.

These students, mostly moving away from their home countries, need proper and purpose-built accommodation near educational institutions. The increasing number of students looking for higher education abroad has been driving the demand for high-quality, modern, and safe housing. This trend has also attracted significant investments from private players to bridge the housing gap and meet evolving expectations.

• Growth of Purpose-Built Student Accommodation (PBSA)

One of the most significant market drivers is the shift toward Purpose-Built Student Accommodation (PBSA). Unlike traditional dormitories or shared housing, PBSA offers modern living spaces tailored to students', needs, including amenities such as high-speed internet, security systems, communal spaces, and study areas.

These facilities appeal to both domestic and international students seeking a better quality of life during their academic years. Universities lack funds and infrastructures to deliver the rising demand for accommodation thus increasing partnerships with private players to develop PBSA, which not only improves students', satisfaction but also enhances investors', stable rental incomes and long-term returns.

Restraints Insights

• Affordability Concerns

While PBSA and private student housing provide premium facilities, they often come at a higher cost compared to traditional options. For students from low- and middle-income families, affordability becomes a significant barrier, especially in regions with high rental prices such as the UK, Australia, and urban centers in the US. High costs can deter students from choosing premium accommodations, creating a demand-supply mismatch. This affordability challenge puts pressure on developers to balance quality and price to cater to a broader student base.

• Regulatory and Zoning Challenges

The development of student housing projects is often hindered by complex zoning regulations, land use policies, and stringent government approvals. In many regions, obtaining permits to develop student-centric housing in urban centers can be time-consuming and costly.

Additionally, regulatory frameworks vary across countries, adding further complexity for international developers and investors. These challenges slow down project timelines, increase costs, and limit the overall supply of quality housing options. Addressing these barriers requires collaboration between governments, developers, and educational institutions to streamline processes and encourage growth.

Opportunities Insights

• Sustainable and Smart Housing Solutions

Integration of sustainable building practices and smart technology poses a great growth opportunity in the student housing market. Consciousness among students about sustainability is growing, and as a result, developers need to use more environmentally friendly methods of construction and energy-saving housing solutions.

Features like solar panels, water recycling systems, and smart lighting are becoming the key differentiators. Additionally, smart technology such as app-based security systems, digital payment methods, and IoT-enabled devices makes it more convenient and attracts tech-savvy students. This trend positions sustainable and tech-driven housing as a competitive advantage for developers.

Segment Analysis

• By Type

There are three types of student housing markets worldwide: Purpose-Built Student Accommodation, University-Managed Housing, and Private Rental Housing. Purpose-Built Student Accommodation has emerged as the leader in the market, which provides students with modern tailored solutions designed specifically for students. The facilities include premium amenities like high-speed internet, private study areas, communal spaces, and enhanced security, making it attractive for international and domestic students to live independently.

University-Managed Housing, usually on or near campuses, is the traditional but still safe choice for students, especially undergraduate students, because it is affordable and close to campuses. However, the available capacity of university housing is limited, which has been a driving force for seeking off-campus alternatives.

Private Rental Housing is the usual choice for students who were not able to get into university-managed housing or who want flexibility, these are apartments or shared accommodations rented directly from private landlords. While this route is more independent, it is mostly without the conveniences and security of PBSA. The increasing requirement for contemporary and secure living has witnessed a rise in investments in PBSA. Thus, it is one of the biggest contributors to the growth of the market.

• By Application

The market can also be broken down along the application segmentation into undergraduate students, postgraduate students, international students, and domestic students. There is a high enrollment rate for undergraduates, but their period of study also lasts longer. Postgraduates tend to prefer secluded and quiet and private accompaniments meant for such higher learning purposes and academic research. International students are the major growth drivers of the market, since they require quality housing with safety, convenience, and amenities while studying abroad.

Their willingness to pay for premium accommodation has led to the development of PBSA. Domestic students occupy university-managed housing and private rentals mainly because they are more familiar with the local markets and cost considerations. The rising number of international enrollments, coupled with the increasing domestic student population, has created diverse demand across these segments, encouraging developers to provide tailored housing solutions.

Regional Analysis

North America, led by the United States and Canada, leads in terms of market share, largely because of the massive student population and the presence of mature higher education systems. PBSA has seen huge growth in this region because of rising enrollments and universities', inability to satisfy the demand for housing. Student housing investment hotspots include cities like New York, Boston, and California, in the United States, which are home to leading universities. Similarly, the demand for modern and well-located accommodations in Canada has increased, which is attributed to international students.

Europe is another significant market, led by the United Kingdom, Germany, and France. The UK is a favorite destination for international students due to its world-class universities, which has contributed to the growth of PBSA. Increasing student populations in cities such as London, Manchester, and Edinburgh have triggered private sector investments in high-end accommodations. Moreover, countries like Germany and the Netherlands are witnessing an increase in demand as students seek affordable yet quality housing.

In the Asia-Pacific region, countries like China, Australia, and India are booming in student housing. Specifically, Australia, with a large international student population, has been attracting significant attention from the government in education infrastructure support, making it a key market for student housing. China and India, in turn, are experiencing increased investments in private as well as university-managed accommodations with domestic student population growth.

Competitive Landscape

Market participants consist of property developers, private investors, and partnerships with universities looking to share the pie. Dominant players like Unite Students, The Scion Group, American Campus Communities, and Greystar Real Estate Partners drive the PBSA market through their modern and amenity-based housing options in significant educational centers including the US, UK, Canada, and Australia. These companies have developed large-scale housing projects that focus on safety, sustainability, and student convenience, thereby creating strong footholds.

Private developers and investment firms are now looking to expand their portfolios through strategic acquisitions, partnerships, and high-yield PBSA projects. For example, mergers and acquisitions in mature markets such as North America and Europe drive consolidation and allow companies to scale their operations. Additionally, universities are partnering with private housing operators to address housing shortages and meet student demand without overburdening institutional budgets.

Emerging players are entering markets in the Asia-Pacific, Middle East, and Latin America, where increasing student populations and government support for higher education are opening new opportunities. These companies are differentiating themselves in competitive markets by leveraging innovation such as smart housing solutions and eco-friendly infrastructure. Increasing investments are intensifying competition, driving companies to focus on affordability, premium facilities, and operational efficiency to attract both domestic and international students.

List of Key Players:

• Greystar Real Estate Partners

• Mapletree Investments Pte Ltd

• Harrison Street

• Kohlberg Kravis Roberts &, Co. L.P.

• APG Asset Management

• Campus Living Villages

• The Unite Group

• The Student Hotel (TSH)

• American Campus Communities (ACC)

• Global Student Accommodation Group

Recent Developments:

• In Nov 2024, Gilbane Development Company, a prominent real estate developer, is excited to announce a strategic partnership with CBRE Investment Management (CBREIM) involving six top-tier purpose-built student housing properties nationwide. The transaction includes the recapitalization of three operational communities through a GP-led secondary process, as well as three shovel-ready development projects, marking the launch of a joint venture partnership.

• Aug 2024, Curated Living Solutions Pvt Ltd (CLSPL) and Shree Banbai Nenshi Trust (BNMV Trust) have announced a landmark lease agreement, setting a new benchmark for off-campus student housing in Juhu, Mumbai. This collaboration marks a significant milestone for the Juhu micro-market, reflecting a shared commitment to delivering premium living spaces for students. Situated in a thriving student hub, the IVY League House stands out as the first-of-its-kind student hostel in terms of both scale and quality. Developed by BNMV Trust, the purpose-built hostel features a total of 325 beds within a sprawling built-up area of 1 lakh sq. ft. Strategically located in the Juhu-Vile Parle area, this asset highlights the dedication of both CLSPL and BNMV Trust to providing safe, high-quality, and modern housing solutions for students.

Global Student Housing Report Segmentation