Cities see surge in student accommodation sector

Padraig Owens, Real Estate

Padraig Owens, Co-Founder, Real Estate Team, Elkstone

The purpose-built student accommodation (“PBSA”) sector has evolved from a small number of early participants, backed by private funding, to a fast-growing segment of the Irish real estate market, supported by international, institutional funds. The development of PBSA has also become an important component of government strategy to address the housing crisis.

Activity in the PBSA sector has surged in the last few years, particularly in Dublin, Cork and Galway, the cities with the most pronounced supply deficit. Large modern PBSA is an attractive asset class for specialist institutional investors such as Hines and Dubai based Global Student Accommodation (GSA), who have acquired a position in the Irish market by acquisition.

Elkstone has watched the modern PBSA sector evolve in Ireland since 2012. Since then, Elkstone has been involved with the development of over 2,000 beds with a number of operators, including a joint venture with Hatch earlier this year to acquire the 265 bed Copley Court property in Cork.


What’s driving demand in the PBSA sector?

Ireland is attractive to this sector for a number of reasons. Firstly there are currently 225,000 third level students in Ireland, according to Higher Education Authority (2018). Outside of London, Dublin has the largest number of third level students in Britain or Ireland, while Cork is in 19th place. Ireland has the fastest growing young population in the EU and an increasing participation in third level education.



There is a limited existing stock of modern PBSA relative to other markets as a result of slow supply during the economic downturn, despite the fact that student housing is considered to be a resilient sector in a downturn.

Copley Court Student Accommodation Cork

There is an increasing number of non-EU students, attracted to studying in Ireland as an English-speaking nation.

Our own experiences support this. Approximately 50% of students in our Copley Court property in Cork are international students, an increase of 25% on the last academic year. This is a good representation of the growth of international students attending Irish third level colleges.

Transaction activity has increased significantly in the last two years. Elkstone has been involved with the sale of a 345 bed site in Galway city. This builds on other deals the firm has supported such as the acquisition of the 265 bed Copley Court property in Cork, the Montrose, Dominick Street, North Circular Road (Dublin) and Western Road (Cork).

Other recent transactions in the sector have included Bain Capital and Carrowmore’s purchase of three student properties from Cairn plc for €45 million, Exeter’s purchase of Cuirt na Coiribe, Galway for €35 million, and Host’s (O’Flynn Group) delivery of 966 student beds at the Point Village for the academic year 2018-19.



In recent months, there have been suggestions of an oversupply of student accommodation in some areas of Dublin. The city has traditionally had many areas with high concentrations of students, such as Rathmines, Ranelagh and Drumcondra. The difference today is that students are housed in secure and supervised purpose-built accommodation rather than flats. The timing of the relative surge in new supply in recent months is reflective of operators’ deadlines to open their doors ahead of the beginning of the academic year in September. We expect the same to happen during the summer of 2019, with little delivered in the intervening period.

While it would appear that the market is on the way to delivering the targeted 7,000 additional bed spaces by the end of 2019, there is still some way to go to bridge the expected 24,000 bed gap by 2024. It is also widely believed that demand has increased such that this gap is already larger.

If planning applications alone were a true indicator of future supply, you could be forgiven for believing that we are some of the way to meeting the existing and growing demand for PBSA in Dublin and our regional cities. Funding, construction costs and constraints, as well as a shortage of expertise in the sector, are equally important factors along the path from planning applications to actual delivery of student housing. There is a greater availability of funding and an improved level of expertise since Elkstone began operating in this sector in 2012, but there is some distance to go before supply satisfies the demand for PBSA. We expect that increasing supply will begin to bring a little more balance to the market and some price moderation over the next few years as the market begins to mature.

Padraig Owens co-founded and leads the Real Estate Investment team at Elkstone, a multi-family office, based in Dublin. Group website:


This article appeared in The Sunday Business Post on Sunday, 23 September 2018