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'It simply won’t be affordable': New student rooms in Dublin will cost a minimum of €249 a week

Concerns have been raised over the affordability of new student accommodation.

Source: TheJournal.ie/YouTube

“IT’S BETTER THAN the Celtic Tiger,” said one construction worker on a building site in Dublin’s south inner city on a sunny day last week.

“There are 50 cranes in the sky above Dublin.”

His words were drowned out by the sounds of building going on around him, as cranes and trucks put together one of Dublin’s newest developments.

Purpose-built student accommodation on Mill Street – at the southern end of The Liberties in the south inner city – is due to be completed by September, in time for the 2017/18 academic year.

When it’s completed, the New Mill will be made up of 400 bedrooms, designed specifically for students in the city. It is a joint venture between Global Student Accommodation (GSA) and their partner Harrison Street Real Estate Capital

The rooms will be sleek, modern and energy-efficient, and will be located about a 15 minute walk to Trinity College Dublin or a five minute walk to DIT Kevin Street and close to major bus routes or Dart stations.

A single en suite room with a shared kitchen will cost a minimum of €249 a week, while a deluxe studio room will cost up to up to €349 a week (bills inclusive).

IMG_20170324_104759 The development on Mill Street. Source: Cormac Fitzgerald/TheJournal.ie

Student accommodation boom

Dublin city is in the middle of a construction boom of student accommodation developments, with thousands of units being built or in the planning stages.

A report from the Higher Education Authority published in September 2015 found that there was a serious deficit in accommodation for students in Ireland.

The report found that the number of students in full-time third level education was set to continue to rise throughout the decade. Numbers were expected to grow from 168,000 in 2014 to 193,000 by 2024 (a rise of 25,000).

On top of this, a feature of Government policy includes making Ireland an attractive place for international students to come to study. A high number of international students can increase college funds significantly.

However, a growing number of people coming here to study from overseas puts further pressure on available accommodation.

90426440_90426440 A person walks past a sign for new student accommodation in Dublin (file photo). Source: Sam Boal/RollingNews.ie

Taking all this into account, the HEA found that there was a deficit of about 25,000 student beds in 2014. This figure was also likely to increase as more and more people entered third level education.

Following on from the publication of this report, a sizeable number of developments have begun to pop up to meet the student demand.

A spokesperson for the HEA says that by the end of this year there will be about 2,460 new dedicated student accommodation bed spaces in Ireland since 2015’s report.

The vast majority of these are in Dublin, where demand is highest.

STUDENTS IN EDUCATION File photo of students walking in Trinity College Dublin. Source: Graham Hughes/Photocall Ireland!

On top of this, there are over 4,100 units currently under construction, which are due to be completed by next year.

Planning permission has been granted for an additional 1,300 units, while planning permission is being considered for about 2,480.

In total, the Higher Education Authority states that there should be in the region of 10,500 new student accommodation beds in Ireland by 2020 since the report was published (providing planning permission is granted to all of them).

Of these, about 8,000 will be in Dublin.

“It is a considerable number,” the HEA spokesperson says. “But we’re still going to need more to keep up with demand”.

90352759_90352759 Current USI president Annie Hoey (centre) pictured with other students in 2014 as the USI launched a student accommodation finance guide. Source: Photocall Ireland

New student developments

“You don’t need a degree in town planning to see that purpose-built student accommodation is booming in Dublin’s north inner city,” Workers’ Party councillor Éilis Ryan wrote in this publication in September.

Even a cursory review shows that student housing in Dublin has become a globally tradable, lucrative commodity.

A look through Dublin City Council planning applications shows swathes of applications for student accommodation in and around the city centre.

90436102_90436102 Eilis Ryan (left) states that global investment firms building student accommodation in Dublin is a sign that the boom is back. Source: Sam Boal/RollingNews.ie

Developments currently under construction and due for completion in the next two years include:

  • Dorset Point: A 463-bed facility on Dorset Street to be opened this summer (operated by global real estate giant Hines)
  • Kavanagh Court: A 520-bed facility on Gardiner Street due to be opened in September (developed by GSA and Irish firm Carrowmore Property and supported by Ulster Bank)
  • The New Mill: The 400-bed facility on Mill Street to be opened in September (developed by GSA)
  • A 407-bed facility at Summerhill (developed by Hines)

On top of these developments, planning permission has been granted for several other student accommodation units across the city, including:

There are also a number of other developments that are awaiting planning permission or that have been provisionally denied permission by Dublin City Council.

A lot of these are centred around DIT’s new Grangegorman campus, which is set to see a huge influx of students into the area over the coming years.

GSA also recently took over Broadstone Hall in Phibsboro (101 student beds). While Hines already runs Binary Hub off Thomas Street (471 beds).

GSA runs its properties through its student accommodation management wing Uninest; while Hines’ properties are managed by its Aparto Student brand.

IMG_20170315_162201 Broadstone Hall is operated by GSA since last September. Source: Cormac Fitzgerald/TheJournal.ie

Dubai-based GSA – working with US investment firm Harrison Street Real Estate Capital – has committed to investing €250 million into student accommodation over the next five years (with 4,000 beds planned by 2020).

Meanwhile, UK student accommodation giant Ziggurat told Fora in September it had plans to develop 4,000 new student beds in Ireland as part of a €400 million investment.

“We see this happening all the time in Ireland,” Éilis Ryan tells TheJournal.ie.

“Something is seen as a good investment and every investor goes mad on it.

We’ve seen it before and I think we’re seeing it now with student housing. I think it’s overdevelopment.

IMG_20170324_094942 Source: Cormac Fitzgerald/TheJournal.ie

Cost of renting 

“First of all, we welcome the fact of purpose built student accommodation is being built,” says Daithi Doolan, chairperson of the Housing Strategic Policy Committee at Dublin City Council.

“For far too long there has been students trying to live in the private sector.

“It’s important that it’s done in measured and planned way close to the universities. So that students aren’t travelling far.

[Student accommodation] brings money into an area and it can develop an area.

As well as the need for thousands of student beds in Dublin, the city is in the midst of an accommodation crisis in the housing and private rental markets.

Rents have skyrocketed in the Dublin in the past number of years. The latest quarterly Daft rental report found that rents in Dublin are now 65% higher than they were at their lowest point in 2010.

download (4) Dublin city has some of the most expensive rents in the country. Source: Sasko Lazarov/Rollingnews.ie

A complete halt to construction of new projects in years following the economic collapse has resulted in demand far outstripping supply.

Dublin also has record numbers of homeless people living in the city, with people staying homeless for longer than ever before due to the lack of availability of accommodation.

The end result of this is that the growing number of students in Dublin third level institutions are finding it difficult to source any accommodation when they move to the city. In many cases they are living in unsuitable, crowded accommodation or becoming homeless themselves.

“Students desperately need accommodation. No one is going to speak badly about more accommodation being built,” says Annie Hoey, president of the Union of Students in Ireland (USI).

So in that sense [the new developments] are good, but there is some concerns about the affordability of some of them.

As stated, the minimum cost of renting a standard en suite room at GSA’s the New Mill will be €249 a week (bills inclusive). Rents at the 520-bed Kavanagh Court on Gardiner Street will be similar to those at the New Mill.

IMG_20170325_144909 The development on Gardiner Street. Source: Cormac Fitzgerald

A look through the other dedicated student accommodation developments in Dublin city centre turns up similar rents.

A standard en suite at Broadstone Hall (GSA’s first accommodation in Dublin, opened last September) costs a minimum of €225 per week bills included.

Rents at the Binary Hub in the south inner city (US real estate giant Hines’ student development) are also €225 a week for a standard en suite.

Meanwhile, the cost of renting a standard en suite at Dorset Point (also ran by Hines) is €230 a week.

“If [rents] are not affordable it will be the bad old days for students,” says Daithi Doolan.

We need to make sure they’re affordable or you will end up with students going back into private [rental market].

A DIT student cost of living guide for 2016/2017 puts the average cost of renting at €462 in the Dublin, plus €28 for bills, bringing it to a total of €490. This puts most dedicated student accommodation at double or almost double the average cost of living of a student.

“I think what you will find is this type of accommodation is more targeted to international students,” says Hoey.

Hoey and Ryan both believe that international students who are already paying significantly higher fees to study in Ireland will be the ones who benefit mostly from this higher-end accommodation.

The New Mill

On a mild, sunny midweek day, Aaron Bailey, head of construction for Europe with GSA, takes TheJournal.ie on a tour through the New Mill show flats.

The deluxe studio rooms are separate from the standard en suites. The standard rooms are set in “clusters” ranging from three rooms to eight in a cluster, with a shared kitchen and common area.

The development is made up of 53 studio apartments and 347 en suite rooms.

The show cluster has eight rooms. The rooms themselves are made up of a queen-sized bed, a desk with a magnetic board and a bathroom with a shower.

IMG_20170324_101355 A standard en suite bedroom at The New Mill.

The bed has plug and usb sockets next the headboard, while the heating and lights can be controlled via an app on residents’ phones.

The common kitchen area is fully fitted and has eight induction hobs, an oven and grill, and a dining and lounge area with a television and table. There are two fridge/freezer units, with four shelves each – one for every resident. Each resident also has their own top and bottom press.

IMG_20170324_104059 The kitchen area has eight induction hobs, two fridges and top and bottom presses for each resident. Source: Cormac Fitzgerald/TheJournal.ie

The show common area is bright with good natural light, and the rooms are also well-lit.

Students have the option of renting the rooms out for either 40 weeks or 51 weeks.

The development will also have a larger common area and kitchen, a cinema, gym, games room, laundry room, study rooms shops and a café. There is an onsite management team to address issues that may arise.

IMG_20170324_104054 The common area Source: Cormac Fitzgerald/TheJournal.ie

“A key aspect of the accommodation we’re providing is that we’re providing a high-quality product which represents good value,” says Bailey.

When questioned on the cost of renting a room at the New Mill, and whether the development is aimed at international students, Bailey says:

 This will attract a broad mix of students. From our experiences in Broadstone Hall we have large percentage of domestic students and also a wide range of international students with over 13 nationalities represented.
We see it as a product that will suit a broad range of students and we pride ourselves on the value we provide in terms of the quality of the accommodation and the service offering we provide.

Bailey says that the rooms will be primarily for third-level Irish and international students, but that the development will also be open the growing number of English language students who come to the city to learn and experience the culture.

He also points towards the gym, study room and games room as amenities that are included in the price of rent and further add to the value of the accommodation.

We see our offering as a good value offering for the quality we’re providing.

When questioned over whether all the amenities are necessary, and whether students may prefer more standard accommodation for a lower price, Bailey points towards planning requirements put in place by Dublin City Council, which he states require GSA to build 20% more volume here than they would in other countries.

“Clearly if we’re building 20% more, that’s costing us 20% more,” he said.

He said looking at building more rudimentary or basic accommodation at a lower price point would require Dublin City Council to revise its planning conditions.

Bailey says GSA is confident that there is a high demand for rooms at the New Mill.

IMG_20170325_144526

Accommodation mix

With over 8,000 new dedicated student accommodation units likely to be built-in Dublin in the space of five years, the landscape of student living is set to change.

“I don’t see a situation where student accommodation will only be in these type of purpose-built units,” says Annie Hoey.

It will always be a mix between different types.

A common argument put forward by advocates of purpose-built student accommodation is that it frees up the private rental market for families and others.

However, Éilis Ryan worries that the new accommodation will not be affordable for entire sections of working class students and lower-income families.

She says that this cohort of students will be further pushed out of the market and discouraged from attending university.

“Students from working class and middle class families won’t be able to afford to live in these developments,” she says.

It simply won’t be affordable at all.

Daithi Doolan says that higher costs may have a negative effect on the number of people who come to Dublin to study.

“Children will be forced to stay in cheaper private accommodation, stay at home, or not go to college in Dublin at all,” he says.

And we don’t want that.

Read: A four-star Galway hotel is set to be converted into student accommodation

Read: 1,500 student beds on the way to Dublin thanks to major US developer

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