Practice Briefing: The significance of purpose-built student accommodation in real estate investment managers’ fund portfolios

Purpose Purpose-built student accommodation (PBSA) has recently become an important real estate sub-sector for real estate investment managers (REIMs) and institutional investors. The purpose of this practice briefing is to assess the significance and increasing importance of PBSA in global REIMs' fund portfolios between 2020 and 2024. Design/methodology/approach Using the IPE annual surveys of the top 150 REIMs' real estate portfolios, the level of PBSA assets in these real estate fund portfolios is assessed over 2020–2024. This is supported by details from the REIMs' websites highlighting the importance and benefits of PBSA in institutional investor portfolios. Using documentary analysis, this practice briefing sees a deep understanding of REIMs setting up PBSA funds, and the institutional investor strategies concerning the role of PBSA in their portfolios. Findings A significant increase in the level of PBSA was evident in REIM portfolios over 2020–2024, in terms of the number of PBSA funds and the level of PBSA assets under management (AUM). In 2024, this saw 36 REIMs engaged in the PBSA sub-sector and $63.3 B in PBSA AUM in portfolios of the top 150 REIMs; significantly more than 2020 levels. A range of strategies was employed for this PBSA exposure for REIMs and institutional investors. Geographic diversification was evident in many PBSA portfolios, reflecting PBSA growth; driven by increasing levels of international students in many countries. Practical implications Student accommodation, part of the living sector, is an important real estate sub-sector that has become increasingly institutionalised in recent years. This is particularly important, as many institutional investors (e.g.: pension funds, sovereign wealth funds) now see PBSA as an important real estate sub-sector in their overall real estate portfolios. This practice briefing gives institutional investors a deeper understanding of the investment opportunities available to access high-quality PBSA assets via these REIMs' global PBSA portfolios, as well as enhancing the level of understanding of PBSA by real estate professionals. Originality/value This research enables more informed and practical real estate investment decision-making regarding the increasing opportunities available with REIMs for PBSA as a real estate sub-sector in a real estate portfolio for institutional investors. This will contribute to satisfying the increasing appetite for PBSA assets by institutional investors going forward.