Investment Performance of Purpose-Built Student Accommodation (PBSA): Insights from the Nigerian Property Market

The demand for purpose-built student accommodation (PBSA) has attracted significant attention over the last decade, particularly in developing countries, due to the inability of higher education institutions (HEIs) to provide adequate hostels for their growing student population. This paper examines the investment performance of this real estate asset class in the context of holding period returns (HPRs) and return dispersion across three PBSA market segments over 2014–2023. This study adopted a quantitative research methodology using a descriptive case study strategy. This approach incorporated personal observation and baseline data collection from individual PBSA properties. Data on annual rent and outgoings were collected from 73 PBSA properties, totalling 3058 rooms and 5889 bed spaces within the studentified neighbourhood of Calabar. The study assessed investment performance using mean annual HPRs, and examined return dispersion using within-year property standard deviation (SD), individual property temporal SD, and category-portfolio temporal SD. Mean annual HPRs were broadly comparable across the three PBSA segments, ranging from 9.46% for middle-end PBSA to 9.98% for low-end PBSA and 9.97% for high-tech/premium PBSA. However, the segments differed more clearly in return dispersion. The mean within-year property SD was 6.27% for high-tech/premium, 6.34% for middle-end, and 8.23% for low-end PBSA. Individual property and category-level temporal variation also differed across the segments, indicating that similar average returns can coexist with different patterns of return variability across properties and over time. PBSA investment appraisers should consider return dispersion alongside average HPR. The findings provide investors, financiers, and valuers with segment-specific evidence to compare PBSA opportunities and assess property-level variability. While earlier studies have largely relied on aggregated property data to assess investment performance, this study extends PBSA investment research through longitudinal, property-level evidence from an emerging market. It distinguishes return dispersion across PBSA properties and over time, providing a basis for understanding PBSA investment performance in the emerging PBSA property market.