A property industry report published this week provided an update on the status of large scale construction projects in the State. A year into the pandemic its impact on construction here is apparent, and the Mitchell McDermott construction sector report flagged up increasing build/construction costs and a huge increase in judicial reviews on fast-tracked large scale projects.
The report, which is conducted annually, also noted something of a sea change in the formerly brisk student accommodation sector. While that market delivered around 3,500 student accommodation units last year, the report predicts a figure of 1,600 this year. That's a substantial fall off in commencements that's likely to impact longer term supply needs. Pre-Covid-19 the Higher Education Authority (HEA) had said 75,640 student beds would be required by 2024 with the actual supply pipeline expected to deliver around 55,000 beds in that period. Now the number of new scheme commencements has slowed dramatically, with one Dublin university postponing construction of a new 1,200 bed on-campus complex following Covid-19.
With international students accounting for 79 per cent of those living in purpose-built student accommodation here the market is applying caution in light of the pandemic. “Booking volumes from students are decreasing and the market is definitely slowing,” said Paul Mitchell, an author of the report. “We’re also seeing an increased preference for single rooms across Europe – possibly due to fear of infection and requirements to self-isolate.” While the report pointed to signs of oversupply in “parts of Dublin” the dramatic fall off in supply is likely to impact the longer term availability of student accommodation at national level.
Another surprise finding was that despite new hotel development being severely hit by the pandemic – only 380 new beds opened in Dublin in 2020 – 4,177 new beds are due to open in the capital this year. Dublin has close to 25,000 beds in total, so that is an increase of 17 per cent this year. With many schemes currently on hold the greatest planned activity is in the budget hotel category. Only a couple of 5-star hotels are planned and most activity at the luxury end is confined to small extensions and refurbishments.