According to the 2024 European Purpose-Built Student Accommodation Investment Barometer, conducted by The Class Foundation and Savills, involving investors and operators with portfolios totalling over 132,000 beds across Europe, with an asset value of circa EUR 25.3 bln, respondents expect to increase the number of beds they have by 70 pct over the next 2-5 years. This would bring the total to over 220,000 beds, deploying a further EUR 22 bln of capital.
Although demand for student accommodation in Prague has remained consistently high for several years, the total supply of new PBSA stock has not been growing fast enough to keep up with this demand. The existing capacity of PBSA in the city amounts to just 28,550 beds, which is far from sufficient to meet the latent demand. Investing in the PBSA sector in Prague presents a compelling opportunity, driven by stable factors such as consistent, and growing, demand, a shortage of PBSA, and the fact that most students cannot afford to rent their own apartments outside of the student accommodation sphere.
Fraser Watson, head of Investment at Savills Czech Republic & Slovakia
90 pct of the PBSA capacity is owned by the universities and the standard of living in these dormitories is incomparable to rooms in private PBSA.
Currently, there are 22 privately owned student residences in Prague with a total capacity of nearly 3,000 beds. If we were to count the capacity of existing co-living schemes, which are also very popular among students, the number would increase to 3,800 beds. Some of the most significant private student residences in Prague include The FIZZ, Comenius, DC Residence, and Zeitraum U Průhonu.
Vojtěch Wolf, senior Investment analyst at Savills Czech Republic & Slovakia
Of all the university students in Prague, 71,200 are Czech nationals with permanent residence outside of the capital city. The largest number of these students reside in the Central Bohemia region, which surrounds Prague and is close enough to allow daily commuting. However, the remaining 46,400 Czech students are likely to seek accommodation in Prague. Adding in the 27,660 international students enrolled at Prague universities, there are around 75,000 university students seeking accommodation in Prague each academic year. Drawing together the supply of, and demand for, student accommodation it shows that the demand significantly outstrips supply. This unmet demand consequently impacts the private rental sector.
As the market continues to evolve, with a dynamic mix of players, investors must navigate economic challenges, respond to changing student demographics, and champion environmental sustainability. Decisions taken now around new developments, financing, and adherence to ESG principles, will have lasting impacts across the sector.
Richard Valentine-Selsey, head of European Living Research & Consultancy at Savills
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