Student Housing and Co-Living: A Boom in Real Estate Investment in Italy
In recent years, co-living has become one of the most dynamic sectors in European real estate. It is no longer limited to traditional residential properties but encompasses a range of hybrid asset classes—from student housing to co-living—that are well-positioned to capitalize on demographic shifts, international mobility, and new models of residential consumption. In Italy, the sector is still lagging behind, but it is growing rapidly. The driving force is student housing, supported by demand exceeding supply and competitive returns.
Real Estate Investments: Volumes Growing in 2025
“The Italian market for residential real estate investments recorded volumes of 1.2 billion in 2025, up 40% from the previous year. The sector accounts for approximately 7% of total real estate investments in Italy,” states Alberico Radice Fossati, country leader and head of capital markets at JLL Italy.
A European comparison helps shed light on the phenomenon. “In Europe, the share of investments in purpose-built student housing has grown from 1.9% in 2019 to over 5% in recent years, a sign of growing investor interest in solid fundamentals and stable cash flows,” adds Raoul Ravara, senior managing director at Hines.
Living asset classes: student housing leads the way
In Italy, however, certain specific trends emerge. Analyzing the breakdown of investments in 2025 “purpose-built student accommodation (PBSA) leads with about 40% of the total, a share significantly higher than the European average (24%),” continues Radice Fossati, with “about 500 million in 2025 and a pipeline of 28,000 beds by 2029 in major university cities.”
And the other segments? “Built-to-sell accounts for about 25% of investments, followed by affordable social housing (15%) and multifamily/built-to-rent (10%),” Radice Fossati points out.
Student housing and co-living: new models of living
This growth is part of a deeper shift in the way we live. “We are witnessing a growing hybridization between student housing and co-living,” observes Francesca Zirnstein, CEO of Scenari Immobiliari. “Student housing offers services related to both hospitality and living—including, among others, 24-hour reception, coworking spaces, a gym, and social areas—while co-living integrates common spaces, personal services, and multifunctional environments.”
Record demand and a structural gap: why student housing is growing
The starting point, however, remains the structural imbalance between supply and demand.
The Italy-Europe gap in student housing
“In student housing, Italy’s coverage rate of 4% remains drastically lower than the European average of 16%, highlighting a structural gap that even the development pipeline will not be able to fully bridge,” emphasizes Radice Fossati, “especially when comparing the Italian figure with more mature markets, such as the UK or Denmark, where this figure stands at over 30% and 20%, respectively.
Growing demand: numbers and students living away from home
The numbers confirm the pressure of demand: with approximately 2 million students in the 2025–26 academic year and a 15% increase in international students, supply stands at around 80,000 total beds. “Student housing is a solid asset class because it meets a growing structural demand,” says Ravara. “In Italy, less than 8% of students living away from home find a place in dedicated residences, compared to 23% in France and 14% in Germany, highlighting significant room for growth.”
Yields of up to 7% and foreign capital: what attracts investors
International capital and the Italian market
The growing interest in the sector is also reflected in the composition of capital and the profile of investors. “Although the international component of invested capital reaches and exceeds 60% of the total volume (more than 500 million euros), the Italian landscape still shows a shortage of specialized investors who, in foreign markets or other asset classes, have been able to drive and guide the market’s consolidation and maturation process,” comments Zirnstein.
Investor Strategies in Student Housing
On the operational side, meanwhile, strategies are taking shape. “In the short to medium term, investors will continue to diversify their real estate portfolios by combining BtS, BtR (with co-living components), and student housing, with ‘investment plans’ of less than €100 million and more than €200 million, respectively,” explains the CEO of Scenari Immobiliari.
Student Housing Returns by City
Supporting this interest is also thereturn profile. “Student housing and co-housing show a stabilization of returns between 4.75% and 7.25% in cities such as Bologna, Padua, Rome, and Turin, between 3.75% and 5.75% in Florence, and between 3.25% and 4.75% in Milan,” says Zirnstein – “By comparison, ordinary residential properties yield between 2.5% and 5.25%.”
From a global investor’s perspective, the picture is even clearer. “The appeal stems from the stability of cash flows and the structural growth in demand,” notes Ravara. “International mobility and limited supply generate very high occupancy rates and resilient cash flows, key elements for long-term investments.”
Rents and profitability: the managed product premium
Significant differences also emerge regarding rents: “Private, professionally managed residences command a 15% rent premium, compared to 6% for university residences managed by universities,” continues Hines’ senior managing director.
New development models and prospects for living in Italy
Growth also depends on new development models.
Real estate conversions and redevelopment
“Conversions from other uses account for about 30% of total volumes, confirming the market’s ability to enhance existing assets through repositioning strategies,” emphasizes Radice Fossati.
The Milan-Cortina 2026 model
An approach applied across various projects. The Milan-Cortina 2026 Olympic Village “represents an example of a public-private partnership capable of generating long-term value and a replicable model. It combines construction quality, innovation, and social impact, becoming a benchmark for institutional investors focused on residential real estate,” explains Luca Mangia, general manager of Coima Rem – The new campus will account for 6% of the total demand (in Milan, ed.), with 1,700 beds and rent levels designed to be competitive and socially sustainable: rates will be subsidized, inclusive of all services, and 25% lower than the market average. “This is an element that sets the project apart from traditional private student housing and reinforces its role in serving the academic community.”
The Outlook for the Student Housing Market
Looking ahead, the direction is clear but not without obstacles. And the gap will remain. “High construction costs, difficulties in obtaining building permits, regulatory risk, and social and cultural factors continue to slow development,” notes Zirnstein, who nevertheless anticipates a gradual consolidation of investment volumes, thanks to the stabilization of monetary policies and the launch of new real estate products.
Ravara shares a similar view, concluding: “Italy is still in a development phase, with demand exceeding supply in major university cities. This makes the market particularly attractive for investors with a medium- to long-term vision.”
(Article excerpted from issue no. 89 of We Wealth magazine, April 2026)
