Spain continues to strengthen its position as Europe’s second most attractive market for Purpose-Built Student Accommodation (PBSA), reflecting both strong underlying student demand and the persistent shortage of purpose-built beds across the country.

Southern Europe is emerging as the most dynamic region for PBSA, supported by low provision rates and solid structural demand. Within this context, Spain ranks just behind Italy, followed by Portugal. Combined, these three markets received approximately €1.7 billion in PBSA investment between January and September 2025, nearly tripling the €570 million recorded during the same period last year. This sharp increase underscores the renewed investor appetite for living-sector assets in markets with significant supply deficits.

Investor sentiment has shifted toward continental Europe after the declining appeal of the United Kingdom, historically the most mature PBSA market. Spain, Italy and Portugal are now considered strategic high-growth markets, driven by the urgent need to expand available stock and by the increasing diversification of international operators.

However, operational challenges remain. Construction costs, limited land availability, and particularly heightened regulatory scrutiny have become key concerns for the industry. In 2025, regulation emerged as the top issue, reflecting growing political attention on student housing as part of the wider debate surrounding youth housing affordability.

Despite these pressures, sector growth expectations remain remarkably strong. The operators and funds surveyed collectively manage around 136,000 beds across Europe and plan to deliver nearly 97,800 additional units within five years, a 72% expansion requiring approximately €20 billion in new capital. Europe’s structural deficit of around 3.1 million student beds further highlights the scale of the opportunity.

Within this landscape, Spain is set to remain a core market, supported by its academic appeal, strong international demand and persistent supply shortages—factors that continue to position the country as one of Europe’s most compelling long-term PBSA investment opportunities.

At CG Capital Europe, we bring extensive experience advising transactions across the living sector, including PBSA, senior living and multifamily. Our deep understanding of the Iberian and European markets, combined with our expertise structuring complex investment processes, enables us to support investors and operators in identifying strategic opportunities and executing successful acquisitions and disposals in a sector experiencing strong structural growth.

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