The Class of 2020 kicked off this year’s regional sessions with an event in Dublin on Thursday April 6th that brought together key stakeholders of the Irish student housing. The current state and direction of Ireland’s thriving student housing market was discussed in two panels, one with the most prominent student housing investors and operators, the other with members of Ireland’s higher education community and Dublin’s City Council.
Desires and needs of these different communities differ, however there was one resounding agreement from the conversation that emerged: Ireland needs more student accommodation. Given the rise of international students and ensuing extreme excess demand in the Irish housing market, this does not come as a surprise.
Panel 1 – Student housing building boom: who is investing where, and what are they building?
Alexander Knapp – Hines
Aaron Bailey – GSA
Matthew McAdden – Atelier
Conor O’Gallagher – JLL
Panel 2 – The growing need for accommodation: trends in higher education, talent attraction, and student needs
Dean Kevin O’Kelly – Trinity College Dublin
Paul Horan – Dublin Institute of Technology
Stewart Roche – HEA
Paul Clegg – Dublin City Council
The common goal of providing the necessary student beds, naturally is approached differently by the various communities on the way these accommodations are and should be produced. While discussing “Student housing building boom: who is investing where, and what are they building?”, the private investors and operators expressed the still unfolded growth potential in larger cities of Dublin, Cork, and Galway.
Neighborhood studentification concerns
Being new to the student housing market, Hines has recently made several purchases in Dublin, making a point to stick to capital cities. Product wise, Irish PBSA matches the UK model, in which students are provided with various amenities raging from gyms and communal areas, to more upscale in-house movie theaters and bowling alleys. Due to regulations on the form that larger student accommodations can take, we primarily see six to eight room clusters sprouting up, even in the face of desires among students for other types of housing (i.e. studios for older students).
One of the main issues brought up against the rapid and concentrated development of PBSAs is the perception of anti-social behaviors that people associate with large congregations of student residents. Matthew McAdden, CEO of Atelier’s student housing Ziggurat, addressed this concern by explaining that PBSA in fact can help reduce issues of student nuisances in city neighborhoods. As students will be living in the area regardless, PBSA concentrates any issues into professional managed buildings.
The Brexit Effect
Brexit was another topic of interest that surfaced on this panel, as we questioned the impact the decision will have on Irish higher education and student accommodation. Conor O’Gallagher of JLL recognized it as a positive opportunity for investors into the Irish student housing market, as more Irish students will choose to remain local instead of going to the UK for school. Additionally, as the only remaining native English speaking country in the EU, many students will choose to do full degrees, Erasmus exchanges. and English-language school programmes in Ireland instead of the UK.
Trinity College to double its accommodation
Of course, with all the private development occurring in the Irish student housing market, it begs the question: why isn’t there more investment from the universities? Dean of Students at Trinity College Dublin, Kevin O’Kelly, whose job it is to double the number of student beds at Trinity College in the next years, made several points on this matter. First, existing PBSA and land values in the city centre of Dublin have become too expensive for universities to afford the real estate markets closest to their campuses. Moreover, given restrictions on the amount universities can borrow, there is no clear way for Irish universities to acquire the capital needed to make larger investments into student accommodation. As a result, most new student beds are coming from, and will continue to come from, the private market in which prices can exceed 250 EUR per week; a price generally outside the budget of most Irish students.
While some may see this as price gauging desperate students, Conor O’Gallagher of JLL pointed out that PBSA prices are merely matching the private rented sector, and that for many students, these PBSA units are better priced than what is found in the general rental market. Stewart Roche of the Higher Education Authority agreed that more private investment will provide additional rooms for students that desperately need a place to live, while at the same time freeing up apartments in the rest of the housing market, providing some much-needed relief.
Beds needed for international students
Regardless of the new student housing stock coming online in the next few years, an extreme supply-demand gap will still be present. Paul Horan, DIT’s Head of Campus Planning, says that the lack of affordable accommodation at Irish universities is one of the key limiting factors for attracting international students. This is an issue that Ireland will need to find a way to address if it is to capitalize on attracting international talent in the wake of Brexit. One of the key ways will be changing local and national regulations to allow for more rapid and varied growth in the student accommodation market. Objectively lack of supply for students is but a symptom of a much larger national issue. Simply put, Ireland needs more housing: whether it is student specific or not.