Sunday 21 April 2019

Delivery of student accommodation surges as housing crisis rumbles on

In demand: AIG has paid over €46m for 364 student bed-spaces Lidl is developing at its North Quarter scheme (pictured) in Dublin 11
In demand: AIG has paid over €46m for 364 student bed-spaces Lidl is developing at its North Quarter scheme (pictured) in Dublin 11
Donal Buckley

Donal Buckley

Student accommodation projects are accounting for an increasing share of residential development activity as reflected in research conducted in conjunction with Construction Information Services (CIS). It shows that 6,060 bed-spaces were built in 22 student projects in Dublin, Cork and Galway between June 2016 and February 2019.

Last year planning permission was granted for a further 2,309 spaces in Dublin and 810 in Cork. In the last four months plans have been submitted for a further 2,216 bed-spaces of which 1,787 are in Dublin and 419 are in a Cork project.

During the last 15 months this sector accounted for 21pc of the 65 applications for fast-track planning applications under the Strategic Housing Development (SHD) programme.

According to CBRE research, there are currently over 75,500 students living in Dublin, following a rise of more than 5pc in the last number of years. Marie Hunt of CBRE estimates that the number of bed-spaces provided in purpose-built student accommodation (PBSA) and universities in Dublin amount to less than 14,000.

"There is therefore significant scope for additional PBSA to come on stream over the coming years in the capital. Interestingly, the volume of international students in Dublin (approximately 15pc) is considerably less than in the UK (22.8pc) so there is scope to encourage more international students to consider Dublin as an alternative to the UK. International students in the main tend to prefer PBSA," Ms Hunt says.

She also believes that purpose-built student accommodation schemes should be welcomed as they will help to alleviate some of the pressure in the general residential rental sector.

As well as addressing the shortage of rental accommodation for students, these new developments also help to address demand for tourist accommodation during the summer months. Those projects which are near the city centre are well positioned to benefit from tourist demand as their self-catering accommodation can supplement or compete with those provided by Airbnb and aparthotel providers.

One of the latest Dublin city centre projects in the pipeline is by Sp Bakery, a company backed by Irish wealth manager Elkstone Partners which has been involved with the development of more than 2,000 bed-spaces. Elkstone provides finance in partnership with developers, mainly Irish. In Cork it is currently working with Irish firm Hatch Student Living on the revamp of a former office block at Copley Street to provide 250 bed-spaces.

Last month Sp Bakery applied to Bord Pleanala for fast-track planning permission for 257 student bed-spaces on the site at 124-126 Parnell Street, off O'Connell Street. This will also involve an urban renewal project as it will include restoration of the existing protected structure of the former Kennedy's bakery.

Elkstone also backed British accommodation provider Ziggurat in its conversion of the former Montrose Hotel in Dublin to student accommodation. Also on Dublin's northside, contractor Walls Construction began work last month on Ziggurat's development of 444 student bed-spaces at 274 North Circular Road and 51 Rathdown Road, Dublin 7, which is close to the new Technology University Dublin campus at Grangegorman as well as being convenient to DCU. It is expected to be completed in time for the 2019 academic year. CIS estimates that it will cost €24m to build those nine blocks which will range in height from one to seven storeys. And last December Irish Student Fund (Dublin) II - Circular Student Ireland applied for a 44-bed project on a nearby site which will be linked to the Ziggurat project.

Also close to Grangegorman, The Park Shopping Centre has planning permission since June 2017 for a €33.7m student accommodation and retail development at Jameson Gate Development and 42-45 Prussia Street, Dublin 7. This will include a new district shopping centre with supermarket, restaurants, shops and medical clinic as well as 105 student units with 541 bed-spaces.

Also nearby CSD (Stoneybatter), a developer based in Manchester, recently applied to Dublin City Council for a development with 142 student bed-spaces on a site to the rear of 20-23a Stoneybatter, and 1-2a Manor Street, Stoneybatter, Dublin 7.

Recently the Irish Independent reported that AIG Global Real Estate agreed a deal to pay more than €46m to forward purchase a student accommodation project with 364 bedroom spaces at the North Quarter mixed use scheme which Lidl is developing at Main Street, Balcurris Road, Ballymun, Dublin 11. Works, which are expected to take in the region of 18 months, have commenced on the two student accommodation blocks which will include a 10-storey landmark corner.

AIG GRE is also investigating the potential for additional investments in the sector in Dublin.

On Dublin's southside US private equity giant Carlyle acquired Carman's Hall student housing development at Spittalfields in Dublin 8 for a sum reported to be around €30m. The 207-bedroom project is being developed in three buildings by Crosslane Student Developments and is due to complete by the autumn. Crosslane aims to develop 3,000 student bed-spaces in Ireland over the next three years.

Also in Dublin 8 the Creedon Group along with Global Student Accommodation (GSA) Group is developing a further 235 bed-spaces as well as recreational spaces on a site bounded by Mill Street and Clarence Mangan Road. This overall development will also include 37 Build-to-Rent (BTR) apartments.

In Dublin's south suburbs Cairn Homes is clearing the former Blakes and Esmonde Motors sites in Stillorgan where it will develop 576 student bed-spaces and amenities as well as 103 apartments for other types of residents and 907 sq m (9,763 sq ft) of retail/restaurant/café/ co-working space and a 298 sq m (3,208 sq ft) community sports hall.

Not too far away in the Sandyford Business District (SBD), Swedish student accommodation specialist Prime Living applied in January for permission for an 817-bed-space project at the Avid Technology site on Carmanhall Road.

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