Italy’s Student Housing Market Attracts Record Investment

Italy’s purpose-built student accommodation (PBSA) sector is experiencing a surge in investment, attracting growing interest from institutional capital. In 2025, investments in student residences reached €500 million, a record for the country, with expectations for continued double-digit growth in 2026, according to Alberico Radice Fossati, Country Head of Italy at JLL.

Investment Trends and Growth Drivers

The €500 million investment in 2025 includes approximately €70 million related to the conversion of existing buildings, representing significant urban regeneration. Around 40% of investments are “forward purchase” agreements, focusing on properties still under construction. JLL notes an unmet demand for approximately 200,000 student beds in Italy.

Demand Outstrips Supply

Italy currently has 2 million students enrolled in higher education (as of the 2024/2025 academic year), a 2.3% increase from the previous year. The number of international students is also rising, up 15%. Despite this growth, the country’s student accommodation capacity is limited to approximately 80,000 beds, resulting in a bed-to-student ratio of just 4%. This is significantly lower than the European average of 16%, and considerably less than the UK (over 30%) and Denmark (over 20%).

Brexit and International Student Appeal

Radice Fossati attributes the growing interest from international investors to Italy’s attractiveness as a study destination, citing factors such as quality of life and cost of living. He also notes that Brexit has redirected student flows towards countries like Italy. International students often have higher spending capacity, further boosting the sector’s appeal.

Cost and Benefits of Purpose-Built Student Accommodation

Student residences offer a competitive alternative to traditional rental options, with monthly costs exceeding €1,000 in cities like Milan. Though, these costs often include amenities such as utilities, Wi-Fi, gym access, and professional management, providing security and transparency. The quick occupancy rates of student residences make them an attractive investment.

Regional Development and Future Projects

By 2029, approximately 28,000 new student beds are planned, with Milan accounting for 40% of these developments. Bologna and Padua are also key investment locations, representing 14% each. Rome is experiencing a slight delay due to urban planning considerations, but is attracting growing interest, with plans for 2,800 new beds. The National Recovery and Resilience Plan (PNRR) is also driving development in secondary cities like Naples, Eagle, Pisa, and Venice, as well as Parma and Modena.

PBSA Compared to Other Sectors

While the hotel industry saw €2 billion in investments in 2025, the PBSA segment remains smaller due to a limited existing product. Currently, much of the investment is directed towards land acquisition for future development, rather than transactions involving existing student residences, as seen in the 2023 sale of the Giovenale student residence in Milan for around €130 million.