Private college closures leave more space to rent
Closures of some private further education colleges which cater for overseas students have opened up opportunities for some Irish accredited colleges to take up the space being vacated.
The closures have also provided space which may be taken by tenants who are seeking space in the secondary office market.
At present about six colleges are currently shopping around for space in Dublin and three are currently in negotiations to secure space in the modern Scotch House building on Burgh Quay next to O'Connell Bridge in Dublin 2 where Eden College and Irish Business School had operated before their closure.
Michael Healy of Savills, who acts for the landlord, declined to comment on the rents being agreed for Scotch House.
However he did point out that he has had approaches from a further two colleges while a UK college has also explored the Irish market but has found it difficult to get the 10,000 sq ft of space that it requires.
"The colleges currently in the market are looking for between 4,000 and 13,000 sq ft of accommodation and they are willing to pay between €15 and €25 per sq ft.
"However as they cannot reclaim VAT this adds a further 23pc to rental costs," he says.
He has had to proactively seek space for some educational clients because relatively few city centre buildings have existing planning permissions for educational use.
"I spotted how a former college building at 26 Merrion Square, Dublin 2, an 8,000 sq ft Georgian property, was auctioned by Allsop Space in July 2012. (It sold for €1.42m). So I approached the new owner before the property came to the letting market and negotiated a rental for the Frances King School of English," he adds.
Sarahkate Nolan of Lisney reports that five colleges have shown interest in two properties that she currently has on the letting market. One of these is 24 Merrion Square which along with its mews to the rear has about 7,400 sq ft. She is quoting €18 per sq ft for the building which would amount to an annual rent of €130,000 and it also has seven parking spaces which could fetch a further €20,000 a year in rent. It is currently in office use and so the two interested colleges may have to compete with prospective office users for the space.
A further three colleges have expressed interested in 5,500 sq ft of space at 9 Lower O'Connell St, Dublin 1, for which she is quoting €67,000 in annual rent.
"This demand is coming solely from existing colleges which are good operators and are now expanding to cater for the extra students that they are getting as a result of the closures of some other colleges," Ms Nolan says.
Since April, 10 colleges which recruit students from outside the European Economic Area have closed in Ireland including eight in Dublin. Following the introduction of new requirements for those colleges next January, it has been estimated that up to 12 more may also close in Dublin unless they change their courses to comply with the new standards required by Quality and Qualifications Ireland (QQI). It is the body responsible for monitoring providers offering further education and training programmes courses which lead to QQI awards.
It has validated 205 private companies offering further education programmes and 82 of these providers are head quartered in Dublin city or county.
Landlords throughout the country who are concerned about colleges which are seeking accommodation should check the accreditation of such colleges. Irish accreditation bodies also inspect the properties to ensure that they have the correct planning permission, fire certification etc and are suitable for college uses. For instance fire escapes are a requirement but Georgian properties which don't have them may not get planning permission for their installation.
Georgian Dublin properties which have been in educational or office use are among the more sought after by the private colleges because these buildings offer self-contained space in the city centre near transport hubs and places where students may get part-time work. However Georgian properties which do not have an existing planning permission for educational use are likely to be ruled out.
Georgians accounted for five of the colleges which have closed since April including two on Harcourt St, a third on Merrion Square, a fourth on Parnell Square West and a fifth on Dominic St.
Accreditation and Co-Ordination of English Language Services, www. acels.ie, is the Irish awarding body which checks the accreditation of the colleges which provide English language courses and it currently has 96 on its list of accredited providers of which 54 are in Dublin including providers based in UCD and DCU.
However some colleges provide courses which are accredited by overseas bodies and landlords would also need to check out such accreditations.
Already some landlords who let buildings to a few of the closed colleges have been stung by the suddenness of the closures and unpaid rents. One creditors' list showed a landlord as being owed a six figure sum. Those colleges which went into liquidation usually have very little assets for distribution to creditors and because banks, staff and revenue commissioners have priority when it comes to any claims on the assets, this leaves landlord rents down the pecking order and so landlords have become much more careful to ensure that they only let to colleges which comply with the new Government standards.
While the new accreditation requirements may benefit the reputation of Irish colleges in the longer term, the recent spate of closures may damage the reputation of the Irish industry in the short-term. Dave Moore, communications officer for the Irish Council for International Students (ICOS) says that more than 2,000 students have been affected by the closures and at least 20pc of those may have left the country.
Meanwhile two colleges are fighting the new accreditation criteria and have taken their case to the courts so it will be interesting to see if this will slow down the level of closures which are forecast.