No longer ‘alternative’?

Market maturity and investment in London’s Student Accommodation sector


One of the most startling findings from the London team’s exploration of investment into residential real estate was the significant volume of capital flowing into the purpose-built student accommodation (PBSA) sector. Research on investment into UK PBSA is limited, so in a recently published paper for the Journal of Property Investment and Finance, Nicola Livingstone and Danielle Sanderson unpack trends and question the maturity of the PBSA market. Is the PBSA market in the UK now ‘all grown up’?

Images from top: Docklands Student Village and Unite Student Accommodation in Newham, both by Images Georges Rex via Flickr.

The research uses empirical evidence from Real Capital Analytics (RCA) to examine the growth of investment into PBSA from 2005-2020. Our paper is also the first to qualitatively examine perspectives on the PBSA market through responses from 40 semi-structured interviews with real estate investors and stakeholders. These three strands of investigation triangulate to provide fascinating insights into the PBSA market today.

London is seen as the vanguard for PBSA investment into the UK, and interviewees commented on how the PBSA sector is also the vanguard for increasing investment into the residential sector. Risk, value and the local market context are key considerations for investors when considering whether to invest – as are alternative PBSA options elsewhere. The regional cities are now proving interesting to more opportunistic investors who want to diversify away from the London market, as it now is perceived as lower-risk, with less potential for higher returns in the city centre. One of these reasons for this take on the central London PBSA market as low-risk low-return proposition is because of the evolving maturity of the sector. Interviewees commented on how the sector is now more mature and the ‘most mainstream of all alternatives’. However, investor perspectives will be subjective depending on their appetite for risk and the granularity of local market. Most importantly, the PBSA sector will continue to be a key consideration as an asset class for investors, one which is becoming understood better through improved market-based evidence and the developing experiences of practitioners.

Although our research contributes to the burgeoning knowledge emerging on PBSA, literature relating to the sector remains limited, and there are many more avenues of investigation to explore. Some UK PBSA markets may experience saturation in the future, depending on the impacts of both Brexit and the COVID-19 pandemic on student demographics; the role of PBSA in multi-asset portfolios and its correlation to other asset classes; and the dynamics of specific city markets including regional cities in the UK, present us with varied and interesting research foci. Our next steps will be to analyse investment trends into residential real estate in London and the UK across different ‘alternative’ asset classes (including build to rent, senior housing, etc.), further analysing the position of PBSA as both a vanguard and a mature asset class. Watch this space!

If you would like to read the paper in full you can source it at: Livingstone, N. & Sanderson, D. (2021) ‘All grown up? Market maturity and investment in London’s purpose-built student accommodation sector’, Journal of Property Investment and Finance,

For further related reading on more WHIG research, Danielle Sanderson and Sara Özogul have also recently published a paper in the Journal of Property Research on PBSA in Europe: ‘Key investors and their strategies in the expansion of European student housing investment’, Journal of Property Research,

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