Global Student Accommodation Group (GSA), the largest student accommodation group operating in Ireland, said it has deferred more than €500 million of planned investment in the State amid ongoing certainty over the sector, including rent pressure zones (RPZ).
Mixed messaging from Government officials on how the purpose-built student accommodation sector (PBSA) will be treated under the new RPZ plans, unveiled in June, “has created additional uncertainty for developers, operators and investors”, said a spokesman for GSA, whose properties are managed by global operating partner Yugo.
London-based GSA, which has invested close to €1 billion developing 4,000 student beds across Dublin and Cork over the past 10 years, has called on Irish officials to engage more with the sector to unlock development – as well as a PBSA delivery strategy to be integrated into the State’s wider housing and higher education objectives.
“As students return to university this autumn, thousands will continue to face significant challenges securing appropriate accommodation,” said John Jacobs, global head of capital markets at GSA. “But regulatory clarity and structured engagement with the sector are essential to unlocking further investment and accelerating delivery.”
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The total number of students in Ireland now exceeds 260,000, including more than 40,000 international pupils. Over the past five years there has been a 25 per cent increase in students, while the number of international students has increased by 50 per cent in the past three years, according to Higher Education Authority data.
This growth has resulted in a national shortfall of student beds, estimated to be between 25,000 and 30,000, according to GSA.
Despite this demand, fewer than 1,300 PBSA beds are currently under construction from a pipeline of more than 11,000 units with planning consent, it said. Planning and zoning restrictions are also making it difficult to secure approvals for new PBSA projects, it added.
“Despite PBSA being a proven and sought-after solution, new developments have stalled due to viability constraints,” GSA said in a report to mark its 10th anniversary in the Irish market. “Unlike other European countries where PBSA is encouraged as a way to meet student demand, Ireland’s planning and investment landscape has created obstacles that has stymied the sector from growing sustainably.”
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Ireland’s PBSA regulations mandate larger bedroom sizes and more communal spaces than in the UK or Europe, increasing construction costs and making some projects financially unviable, it added.
GSA, which is backed by investors such as US-based Harrison Street and Nuveen, earlier this year went about raising more than €500 million through the sale of stakes in its Irish portfolio to reinvest in further development. However, the process was put on pause over the summer.
Property research firm Green Street previously reported that three high-profile investors had been circling assets, with the real-estate arm of Texas private equity giant TPG among those.
The pause comes as GSA, which manages $7 billion (€5.97 billion) of assets across 11 countries, is accelerating investment elsewhere. The company, with backing from Nuveen, acquired a 3,700-bed portfolio of student accommodation in France in June for €540 million.
