Just 850 purpose-built student accommodation (PBSA) spaces were under construction in Dublin during the third quarter, a sharp drop on recent years, indicating that the future development pipeline for the sector is unclear.
A new report from Cushman & Wakefield finds that close to 1,350 new PBSA bed spaces are due to be delivered to the Dublin market in 2021, bringing total stock in the market to about 18,700 bed spaces across 56 developments.
The sector has come through a difficult time. Low occupancy was reported by most operators as university campuses remained closed throughout the 2020/2021 academic year, and the majority of learning took place online, with the exception of practical and time-critical work.
Nonetheless, while on-campus learning has returned to a large extent, with a return to close to full occupancy for many of the PBSA buildings, the report notes that from 2022 onwards, the delivery of new bed spaces will reduce significantly.
This year, for example, just 850 bed spaces are under construction in Dublin across three developments. This compares to about 4,300 beds across 14 schemes under construction as of the end of June 2019.
Trinity College Dublin has close to 250 on-campus bed spaces under way at Oisín House in Dublin 2, while the remaining beds under construction are located at Ardee Point and Mill Street in Dublin 8, across two privately owned schemes, which are due to be operated by Nido Student and Uninest.
The decline in construction comes on the back of a number of years of annual double-digit growth during 2016 and 2019. This surge in construction led to a reduction in the student-to-bed ratio from almost 4:1 in 2018, to a now estimated 2.7:1, according to most recent figures.
Rooms at PBSA developments typically rent from upwards of about €1,000 in Dublin.
Despite the delivery of new stock declining in more recent times, there remains a significant volume of potential PBSA bed spaces in the delivery pipeline. At the end of the third quarter of 2021 for example, about 7,350 student-bed spaces across 17 developments in Dublin had planning permission granted.
However, uncertainty lies as to how much of this will actually be delivered. As the report notes, several sites with planning permission granted for student accommodation are considering, or have applied for, new permission for residential use. The report cites examples including the Avid Technology building in Sandyford, south Dublin, which although has been granted planning permission for PBSA, has only recently been refused planning for residential and the Cairn Homes Stillorgan site, which has applied for change of use to PRS.
There will be continued activity however.
Emma Reardon, associate director with Cushman & Wakefield, said that investor interest in Irish PBSA has picked up in the final quarter, "with transactions anticipated to follow".
“The strong fundamentals of the Irish PBSA market is likely to lead to a flurry of activity, as some key operational PBSA portfolios are brought to the market, with assets located both in Dublin and regionally,” she said.
Outside of Dublin, the development picture looks more positive. Cork is the largest market, with a stock of about 6,200 beds as of the third quarter of 2021. Almost four-fifths of this stock is accounted for by private ownership, and there has been a pick-up in beds delivered with close to 600 beds delivered to the Cork market for the academic year 2020/2021. This comprised 417 beds at a Uninest development at the former Beamish and Crawford brewery, and Nido’s first Irish residence at Curraheen Point, which provides about 160 beds.
Looking to development activity in Cork, there are currently 1,700 bed spaces under construction in the city, with about 800 beds expected to complete in 2022, including a 600+ bed scheme at the former Coca-Cola bottling plant on the Carrigrohane Road, which is currently being developed by CA Ventures.
In Galway, Cushman & Wakefield estimates a current stock level of just over 4,500 bed spaces, with two new openings over the past year. Mezzino opened almost 400 beds at its Westwood development close to the NUIG campus, while a further 153 beds opened just off Eyre Square at From Here-Galway Central.
There are currently just over 670 beds under construction in Galway, all of which are located on the NUIG campus, with expected delivery by 2023. The longer pipeline picture in Galway also appears positive, with almost 1,350 beds currently with plans granted and a further approximately 70 beds with plans submitted. As the report notes however, with no recent commencements it is unclear as to when, or if, all these beds will be delivered to market.