‘Luxury’ student accommodation on the rise, but can anybody afford it?

Thousands of purpose-built students beds are coming onstream – for €1,000 or more a month

Uninest New Mill in Newmarket, Dublin 8, which opens this month, is an example of the new breed of high-spec student accommodation being built in the capital.

 

Student accommodation might conjure up images of grotty homes with mildewed curtains and questionable electrics.

Now, a new breed of purpose-built luxury student accommodation is on the way, kitted out with flat-screen TVs, ensuite bathrooms and access to communal cinemas and gyms.

The only question is: can students afford these new facilities, even in the teeth of a student accommodation crisis?

Uninest New Mill in Newmarket, Dublin 8, which opens this month, is an example of the new breed of high-spec flats on the way.

Prices range from €245 a week for an “ensuite cluster room” (double-bed, floor-to ceiling glazing and ensuite with demister mirrors) to €345 for a deluxe studio (double bed, sleek kitchen and dining area). These prices are equivalent to between €980 and €1,380 a month.

This complex is one of the first to be delivered in what is a mini-building boom for purpose-built student accommodation across the capital.

About 7,500 new beds are on the way over the coming years, with many in the category of expensive, high-spec flats or studios.

While there are virtually no apartment blocks being built in the capital, property analysts say student accommodation is surging as it generates higher profits for developers who do not need to meet the same size restrictions or social housing requirements that apply to regular developments.

Low risk

They are also considered low-risk for investors, who are safe in the knowledge that there is a guaranteed income from students over the coming years with numbers at higher education set to grow by up to 25 per cent by the end of the decade.

The firm behind the New Mill development is UK company Global Student Accommodation (GSA), one of the biggest players in the industry.

In partnership with a Chicago-based real estate private equity firm, it snapped up a series of sites during the economic downturn. It is now spending €250 million in Dublin on a series of complexes which will house more than 5,000 students over the next five years in inner-city locations such as Gardiner Street and Brunswick Street.

If there are concerns over the rental prices, the firm doesn’t share them: all 400 beds at the New Mill development have already been filled.

Tim Mitchell, head of real estate for GSA in Europe, accepts that while rental costs may be out of reach for many, the company is targeting a “certain element of the student community”.

“I think it is very good-value accommodation because everything has been thought through,” he says.

“You can imagine an international student who leaves Beijing and they might fly here overnight and the might arrive here at three or four o’clock in the morning and their biggest worry might be ‘where am I going to live, what will it be like?’

“And they will come to one of our residences and be met by a multilingual onsite team, have a plug-and-play approach to accommodation that is very different to the old-style accommodation where you might arrive with no one to greet you.”

Most affluent

Students’ unions, however, say relying on private developers to tackle the accommodation crisis means the new supply of beds aimed at students will only ever be available to most affluent.

“When you’re studying a full time course, trying to engage in social life of college community, how can you be asked to pay €1,000 a month on top of that?” says Kevin Keane, Trinity College Students’ Union president.

“There should be affordable student housing within commuting distance of the university. If we want to attract people into third-level education, we can’t turn student accommodation into the reserve of the very wealthy.”

He says students, increasingly, are being pushed out of the rental market and forced to commute long distances or look at higher education institutes outside Dublin.

“We have students coming to us every year who wanted to study at Trinity, or any other university in Dublin, but are not able to because of cost.”

‘Excess demand’

In the meantime, more student accommodation complexes - many of which resemble boutique hotels -  are being built right across the capital.

“The growth in student numbers means there is excess demand, and that looks set to remain unmet for quite a number of years,” says David Duffy, director of Property Industry Ireland.

“Compared to apartment blocks, student accommodation is more viable. It stacks up in part due to the fact that you don’t need car-parking spaces and there is no part five [social housing requirement]. All that makes a difference to the viability, which is contributing to the boom.”

Tim Mitchell of GSA says the market will ultimately dictate whether students are prepared to pay for this standard of accommodation.

“Students live with us, they rebook with us and they are happy with what they get,” he says. “It is a sensible way of saying if we don’t get that right – if we drop the ball on pricing, if we drop the ball on service, we won’t be full and then we won’t be successful.”