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UK: Investment activity in the purpose-built student accommodation (PBSA) sector reached £1.83 billion, a new record, in Q3 2025, according to Knight Frank’s latest UK Student Accommodation Outlook report.
Year-to-date investment is around £3.4 billion, up three per cent on the same period last year.
Single asset operational stock accounted for the largest share of investor activity so far this year, with 27 assets sold. There have also been nine portfolio sales in the year-to-date.
A number of key deals transacted over the course of the quarter including QuadReal’s acquisition of the Apollo portfolio for more than £550 million, and KKR’s purchase of the Curlew Capital portfolio for around £230 million.
A rise in new entrants and the return of existing players showcase the attractiveness of the UK PBSA sector for global capital allocation. Knight Frank’s analysis reveals that, since 2019, new entrants have taken a growing share of portfolio transactions. New capital sources accounted for 67 per cent of total portfolio transactions last year, and so far in 2025 have accounted for 44 per cent of portfolio sales. This momentum is expected to continue. Established players remain the core component of the UK PBSA investment market, but with new capital sources looking for best in class assets and/or first-generation assets with potential to deliver value-add returns, the liquidity pool has deepened.
Average rental growth across all room types slowed to two per cent in 2025/26, down from a peak of 8.3 per cent. This return to long-term trends of two to three per cent annual growth, aligning with CPI targets and reflecting a more price-sensitive student base, according to Knight Frank.
Merelina Sykes, joint head of student property at Knight Frank, said: “While the headline figures point to a liquid market, the underlying dynamics reveal a more complex picture, with transaction timelines having lengthened in some cases. Investors have a clear appetite for first-generation standing stock with value-add potential – though fire safety remediation, leasing cycle delays, and operational complexities have contributed to slower deal times.”
Katie O’Neill, from the global living sectors research team at Knight Frank, added: “For the first time in our rental index, university operated accommodation outperformed private PBSA. University owned stock saw rents rise by 4.8%, compared to just 0.3% for private direct-let assets. While it is true that some trends of weaker occupancy emerged again this year, other factors – outside of the real rental levels – that are impacting lease up and retention include brand loyalty and hands on asset management.”
Highlights:
• Investment activity in the purpose-built student accommodation (PBSA) sector reached £1.83 billion, a new record, in Q3 2025, according to Knight Frank’s latest UK Student Accommodation Outlook report
• Year-to-date investment is around £3.4 billion, up three per cent on the same period last year
• Single asset operational stock accounted for the largest share of investor activity so far this year, with 27 assets sold. There have also been nine portfolio sales in the year-to-date
• A number of key deals transacted over the course of the quarter including QuadReal’s acquisition of the Apollo portfolio for more than £550 million, and KKR’s purchase of the Curlew Capital portfolio for around £230 million
