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Dublin’s student accommodation shortage offers investors lucrative opportunity

The capital’s student-housing market offers stable, long-term returns of up to 7% driven by consistent demand

Dublin has emerged as a prominent hub for education, attracting students from across Ireland and around the globe.

With world-renowned institutions such as Trinity College Dublin, University College Dublin, and Dublin City University, the city has positioned itself as a centre of academic excellence. However, a pressing issue threatens to undermine this growth, the acute shortage of student accommodation.

The demand for student accommodation in Dublin far exceeds the current supply. According to the Higher Education Authority (HEA), there are approximately 85,000 full-time students in Dublin, with 67,000 or 79 per cent being domestic students.

Dublin has close to 19,500 beds available, encompassing both privately owned schemes and on-campus housing. This results in a shortfall of approximately 65,000 bed spaces, or a 4.3x student-to-bed (STB) ratio. However, considering some students live at home, the true shortfall may be closer to 25,000 to 30,000 beds.

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Nationwide, the student population has increased significantly. There are almost 200,000 full-time students across Ireland, reflecting an 18 per cent increase over the last decade.

International student enrolments have also surged to almost 30,000, constituting 15 per cent of total students. This is a notable rise from 2007, where there were just over 13,000 international students (9 per cent of total students). The most common countries of origin for these students are the US (14.5 per cent), India (13.5 per cent), and China (11.3 per cent).

Addressing this accommodation crisis presents a lucrative investment opportunity. The student housing market in Dublin offers stable, long-term returns driven by consistent demand. In fact, Savills Ireland has highlighted that student accommodation investments can yield returns of 5-7 per cent, outperforming many traditional real estate sectors. The consistent influx of students, coupled with the lack of sufficient housing, ensures a steady stream of tenants year-round.

Moreover, the development of student accommodation contributes positively to the local economy. Construction projects create jobs, and once operational, these accommodations support local businesses by increasing foot traffic and spending in the area. Investing in student accommodation is not just a financial win but also a socio-economic boost for the city.

Landmark Bakers Corner pub for sale with full planning for student-accommodation scheme at €7m

To attract more investment in student accommodation, several steps need to be taken. Firstly, streamlining the planning and approval process is crucial. Bureaucratic hurdles can be a significant deterrent for developers. Implementing a fast-track approval process for purpose-built student accommodation (PBSA) projects would encourage more developers to invest in this sector.

Secondly, offering incentives such as tax breaks or grants for developers who build student accommodation can significantly boost interest. These incentives could be tied to commitments on affordability and quality standards to ensure that the housing provided meets students’ needs without exorbitant costs.

Thirdly, integrating student accommodation into broader urban development plans is essential. Ensuring these developments are well connected to public transport, equipped with necessary amenities, and located in safe, vibrant neighbourhoods will make them more attractive to both investors and students.

Lastly, fostering public-private partnerships can be a game-changer. Collaboration between educational institutions, government bodies, and private developers can lead to innovative solutions that effectively address the accommodation shortage. For instance, universities could provide land or capital, while private developers would bring in the expertise and operational efficiency.

Addressing this need presents a prime investment opportunity with the potential for substantial returns and significant economic benefits. However, to attract the necessary development, strategic policy interventions, incentives, and collaborative efforts are imperative.

By taking these steps, Dublin can enhance its reputation as a leading education hub, ensure the wel-being of its student population, and stimulate sustainable urban growth.

Kevin McMahon is director of investments at Savills Ireland

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