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Once a niche investment, student housing has now entered the mainstream of European real estate. At this year’s Expo Real in Munich, the sector took a prominent position for the first time, signalling its transformation into an institutional asset class with both financial and social appeal. A week later, Aviva Investors and Amro Partners announced a €500 million platform to develop around 3,000 student beds in Germany, beginning with a €60 million scheme in Berlin’s Charlottenburg district.
The timing is symbolic. Demand from students, especially international students, continues to outstrip supply, while the broader German housing market remains paralysed. According to BONARD, which presented its latest data at the Expo REAL panel “Student Housing: A Major Opportunity for Europe’s Cities,” PBSA market saturation remains strikingly low across Europe’s top study destinations: 17% in Madrid, 20% in Berlin, 30% in Greater London and 37% in Amsterdam. The message was clear: Berlin’s student housing market is still in its infancy compared to peers, offering substantial headroom for growth.
“Student housing delivers both social and economic value,” said BONARD CEO Samuel Vetrak. “Cities need suitable accommodation for students, and investors are increasingly drawn to its stable performance and strong fundamentals.” Moderated by Professor Greg Clark, the Expo REAL panel brought together Amsterdam and Barcelona city councils, and PGIM Real Estate to discuss how PBSA can relieve urban housing pressure while offering long-term, income-resilient investment opportunities. BONARD’s research shows that cities with more PBSA supply have experienced milder rent inflation in their private rental markets, underlining the stabilising effect of purpose-built stock.
Capital Follows Conviction
The Aviva and Amro platform is the most ambitious single commitment to Germany’s PBSA sector so far. The venture plans to acquire and develop new assets in major university cities over the next three years, targeting completion of the first 200-room residence before the 2028/29 academic year. “The student accommodation sector remains under-supplied in Germany,” said Aviva’s George Fraser-Harding. “This is a country with some of Europe’s brightest students and dynamic universities. We see long-term value in helping those institutions prepare for the future.” Amro CEO Raj Kotecha called it the company’s largest capital partnership to date and “a conviction bet on the opportunity in Germany.”
The deal follows similar expansions by international operators. Nido Living, with a €1.2 billion Iberian portfolio, is entering Germany under new head Daniel Havers, while Home & Co, founded by Round Hill Capital and TPG Real Estate Partners, has bought a 164-unit property in Frankfurt’s Bockenheim district for €20.5 million, with plans for modernisation and ESG upgrades. These moves reflect a broader trend: experienced PBSA managers are scaling into Germany, treating it as Europe’s next core living market.
Although Germany is Europe’s largest student destination, PBSA still accounts for barely 1% of residential investment transactions, compared with around 15% in the UK and the Netherlands. The potential for growth is therefore considerable.
Affordability Still Out of Reach
For students, however, the picture looks very different. The MLP Student Housing Report, cited by REFIRE last month, shows rent growth slowing to 2.3% in 2025 from 5.1% the previous year, but the affordability gap widening sharply. The average student flat now costs €541 a month, while the state BAföG housing allowance of €380 covers rents in only four German cities. In Munich, it barely pays for fifteen square metres. Smaller apartments under 40 square metres rose by 4.3% last year, more than twice the rate for shared flats, highlighting the acute shortage of compact, affordable units.
“Prices have paused for breath, but not reversed,” said IW Köln economist Dr. Michael Voigtländer. Demographics suggest student numbers will rise again, particularly among international students, who already make up a quarter of enrolments and show high long-term retention rates.
REFIRE: The Expo REAL spotlight and the Aviva and Amro partnership confirm that Germany’s student housing market has entered a phase of institutional maturity. The fundamentals of high occupancy, limited supply and durable demand remain solid, but the social mission still lags the investment story. Until policy support and subsidy levels rise meaningfully, PBSA will continue to serve investors better than students. Germany’s universities may attract the brightest minds, but without affordable beds, many will struggle to find a place to stay.