Five purpose-built student accommodation properties (PBSA) located in Dublin have been sold by Chicago based property investment firm Harrison Street in a deal worth €400 million. Global Student Accommodation Group (GSA), joint venture partner of Harrison Street, are the new owners of the five properties having finalised a transaction of the portfolio earlier this month. In total, the five properties comprise 1,971 beds and consist of Ardcairn House, Kavanagh Court, New Mill, The Tannery and Broadstone Hall. These locations primarily serve students from UCD, Trinity College, RCSI and TUD, having an average occupancy rate of 97%.
GSA is a UK-headquartered property management firm, who provide student housing in eight countries globally. Their group chairman, Nicholas Porter, has said that this deal “underpins GSA’s global growth strategy…helping to generate increased opportunity for our investors and partners.” Paul McDonnell, head of property finance at Bank of Ireland, has also publicly announced their support of GSA’s acquisition, speaking on behalf of Bank of Ireland when he stated: “We are committed to supporting student accommodation projects, and we believe they have a crucial role to play in helping to solve current issues in the rental market.”
However, some experts have been critical of the broader implications this deal may have on the Irish property and housing environment. Investment yield on specialist properties such as the ones in this deal directly benefit from the particularly high rent prices in Dublin and as such are particularly attractive to developers. Students are required to sign a 40-week contract to secure a single occupancy en-suite room found in these types of premises, with average rental prices ranging from €200 to €260 per week. For the nine months of academic term, developers’ gross income has reached the €10,000 range. These properties are then targeted at tourists for the summer months, when up to double the prices paid by students can be earned.
UCD School of Architecture, Planning and Environmental Policy Course Director and assistant Professor Orla Hegarty has warned against the repercussions of this strategy, saying that it was done without consideration for the impact it would have on the rest of the Irish property and housing market. When speaking on the topic, she stated “If you are looking more broadly at the housing crisis, it has diverted a lot of development investment and construction capacity to prioritise international students over people here in a housing crisis.”
Ian Walsh – Reporter