The shortage of student accommodation in Ireland presents a potentially lucrative opportunity for investors, according to a new report.
Savills Ireland points out that Brexit has has boosted Ireland’s appeal to international students, raising demand for purpose-built student accommodation (PBSA).
“Combined with growing numbers of domestic students entering third-level education, Ireland is experiencing an acute shortfall in student housing, making this sector increasingly attractive for investors,” the report states.
Recent research from Savills and The Class Foundation found that investors plan to expand their European PBSA portfolios by up to 70% over the next two to five years, with nearly a third already investing in Ireland and the UK.
The demand for student accommodation in Dublin far exceeds the current supply.
According to the Higher Education Authority (HEA), there are approximately 89,600 full-time students in Dublin, with 69,200 or 77% being domestic students.
The report by Savills states that Dublin has close to 21,700 beds available, encompassing both privately owned schemes and on-campus housing.
This results in a shortfall of approximately 68,000 bed spaces, or a 4.1x student-to-bed (STB) ratio.
However, considering some students live at home, it said the true shortfall may be closer to 25,000 to 30,000 beds.
“The ongoing shift in student demographics, coupled with stable rental yields and high occupancy rates, has made purpose-built student accommodation a highly attractive investment,” said Ebba Mowat, Director of Development Agency & Consultancy at Savills.
“Unlike other sectors facing greater economic uncertainty, lenders remain confident in funding student housing developments, with loan-to-cost ratios commonly reaching 65% from traditional banks and over 70% from alternative lenders.”
