Existing schemes currently cater for only 13% of the student population
Dublin’s growing student population and the current under-supply of beds are attracting the world’s leading global investors with 7,181 bed spaces now in the pipeline according to Knight Frank’s Student Housing Report 2017.
The number of full-time students in Dublin has increased by 34% over the past 10 years, accounting for 43% of Ireland’s student population. However, the provision of beds in Dublin has failed to keep pace with the growth in student numbers, creating a situation whereby the market is now structurally under-supplied. Knight Frank estimates that there are currently 10,442 beds in operation in Dublin which cater for only 13.2% of the student population. In an international context this is extraordinarily low. For example, in London, 30% of full-time students have access to Purpose-Built Student Accommodation. This shortage of beds has put upward pressure on rents, with high-quality new builds coming online in the city centre this year expected to achieve average weekly rents in excess of €230.
The prospect of strong income growth in the context of Dublin’s growing student population and the limited supply of beds have resulted in some of world’s leading student housing specialists, such as GSA and Ziggurat, investing heavily in Dublin which is helping to alleviate the current under-supply. There are 21 private projects currently in the pipeline which have the potential to provide 7,181 beds by 2019. Of these, 4,197 are under construction, 1,027 have been granted planning permission while a further 1,957 are in the planning process. A number of significant schemes are nearing completion with 1,508 beds expected to be delivered by year-end. These include two schemes by GSA, namely Kavanagh Court on Gardiner Street and New Mill in The Liberties which will deliver 489 and 406 beds respectively. Another substantial scheme set to be completed this year is taking place at Dorset Point, where 447 beds are due. The vast majority of schemes are due to be completed in 2018 and 2019 including the Point Campus which is the largest scheme currently under construction with 966 bed spaces due to be delivered in 2018.
93% of beds in the construction pipeline will be located in Dublin 1, 7 and 8. The consolidation of DIT’s student population, which is currently scattered across 40 locations around the city, in its new Grangegorman Campus is increasing the popularity of Dublin 7. The LUAS Cross City Line – which is due for completion by year-end 2017 – will cut travel times from Grangegorman to the city centre to just 15 minutes and is thus expected to also increase the popularity of Dublin 7 with students of Trinity College, The Royal College of Surgeons and Dublin Business School. The cross city line is adding to the desirability of sites located in the vicinity of city centre LUAS stops in areas such as The Point Campus in Dublin 1 and the cluster of new schemes in Dublin 8.
Despite the substantial number of bed spaces that are now in the private development pipeline, it is worth noting that even if the entire current private pipeline was delivered tomorrow, we would still need approximately 6,000 beds in order to reach the level of provision that is available in London. Indeed, the demand and supply dynamic is likely to remain imbalanced for the foreseeable future as student numbers in Dublin are forecast to maintain their upward trajectory, aided by further increases in the international student population as a result of Brexit. As this asset class becomes increasingly popular with international investors, Dublin will remain an attractive prospect owing to the potential for further income growth in the context of this limited pipeline and growing student population.