Planning regulations may hinder growth of build-to-rent sector
The growing potential of Ireland's build-to-rent (BTR) sector is facing a number of possible obstacles according to a new report by international construction consultancy, Linesight.
Drawing on data from its sectoral knowledge and direct experience of consulting on 7,000 BTR units in Dublin and the Greater Dublin Area, the company's research delivers a number of interesting findings.
Arguably the most notable of these is the reluctance of developers to designate new schemes as build-to-rent under the planning guidelines, due to the restrictive requirement for such developments to be held for at least 15 years before being sold.
Also noteworthy is the report's finding that while build-to-rent units can be delivered at a similar cost to those being constructed for the build-to-sell (BTS) market, offering flexibility for future conversion from BTR to BTS is coming with a premium cost.
Linesight's managing director, Richard Joyce, says: "Our research indicates that there is a fundamental desire to build this asset class in Ireland at scale, with pension and insurance funds constituting the largest national and international investors in the sector. BTR is seen to be a relatively stable and sustainable investment area, and while rents will adjust as supply increases in the coming years, there will simply be additional emphasis on factors that are already key areas of focus, such as product quality, location and amenities."
While 29pc of the Irish population is now renting, that percentage is set to grow owing to the nation's age profile. Of the current population 29.5pc falls within the 25-44 age bracket - the target market for rental accommodation.