The Irish Government has published its National Student Accommodation Strategy 2026–2035 (the Strategy), setting out a decade-long roadmap to deliver approximately 42,000 additional student beds through a combination of purpose-built student accommodation (PBSA), Rent-a-Room provision, and sustainable commuting measures.
For investors and developers active in the PBSA sector, the Strategy represents one of the most significant policy interventions in recent years — combining rent reform, fiscal incentives, planning amendments, and structured public-private partnership models to address what has been a persistent viability gap. While many of the individual measures have been signalled or introduced over the course of 2025, the Strategy consolidates them into a coherent framework with a view to improving the investment case for student accommodation in Ireland.
The scale of the opportunity
The headline target of 42,000 additional beds by 2035 reflects both an existing deficit of approximately 15,000 beds and projected demographic growth in full-time student numbers to an estimated 243,499 by 2035. The gap between current supply and projected demand is substantial and, critically, the Strategy explicitly targets meeting the 42,000-bed requirement without increasing reliance on the private rental sector. The effect is that additional capacity is intended to be delivered through PBSA and Rent-a-Room accommodation.
Perhaps the most immediately actionable figure is the approx. 14,279 PBSA beds that have received planning permission but have not progressed, with viability concerns consistently cited as the key barrier. The Government’s stated ambition is to unlock these stalled permissions through a combination of the measures outlined below.
A more favourable rent-setting framework
The recently introduced rent reform package represents a significant improvement on the previous regime and directly addresses the viability concerns that had stalled investment in new PBSA.
For new PBSA developments where construction has commenced since 10 June 2025, initial rents can be set at market rates. Annual increases in the first two years are linked to CPI with no 2% cap, and rents can reset to market levels again at the end of each three-year period. As we have previously commented, this is a meaningful departure from the rent pressure zone framework that had constrained investor returns on new-build stock.
HEI partnership structures: nomination agreements, site licences, and site servicing
The Strategy establishes a structured programme for public-private collaboration in PBSA delivery, underpinned by three core mechanisms.
- Nomination agreements: These are formal contracts under which a Higher Education Institution (HEI) commits to nominate students for an agreed number of beds in a private development for a defined period, typically around five years. For private developers and operators, this provides a degree of occupancy underwriting. Technological Universities do not yet have government-approved powers to borrow in order to allow them to meet any contingent liabilities associated with nomination agreements. A borrowing framework is to be designed for these institutions, subject to the sanction of the Minister for Finance and the Minister for Public Expenditure, with each individual nomination agreement requiring ministerial approval. An initial pilot phase is proposed to assess effectiveness and cost-efficiency before wider rollout.
- Long-term site licences: HEIs may licence on-campus sites to private developers for approximately 60 years, with the PBSA reverting to HEI ownership on expiry. This model will be familiar to investors experienced in the UK PBSA market and represents a significant opportunity to develop on institutional land without outright acquisition costs. While the full details of how this arrangement will be structured are not yet clear, it appears the long-term licences will operate in the same manner as the public-private partnership model, underpinned by a nomination agreement with the relevant HEI.
- State-supported site servicing: The Strategy provides for the State to fund surveys, ground condition assessments, and enabling works on or adjacent to relevant sites, reducing risk and upfront costs for private developers. The Department of Further and Higher Education, Research, Innovation and Science (DFHERIS) will also consider financing early-stage activities such as campus master planning, site assessments, remediation, and infrastructure provision.
The programme will be delivered on a phased basis, beginning with Cork, Dublin, and Galway, followed by Waterford, Limerick, and Athlone, and subsequently Tralee, Carlow, Sligo, and Letterkenny. Market engagement through expressions of interest is expected in 2026, formal tendering in early 2027, and construction from 2028. DFHERIS intends to engage the National Development Finance Agency for advice on the market engagement exercise and programme development, signalling a structured and institutionally credible procurement process.
VAT reduction on PBSA sales
Budget 2026 introduced a reduction in VAT from 13.5% to 9% on the sale of new apartments, including PBSA, effective from 7 October 2025 to 31 December 2030. The measure is designed to improve the viability of privately developed PBSA by providing an exit strategy for developers who do not wish to retain long-term ownership.
Planning and design reforms
The updated Design Standards for Apartments, Guidelines for Planning Authorities (2025) apply Specific Planning Policy Requirement 8 to PBSA, with specific provisions relating to ensuite bathrooms and space allocation in kitchen, living, and dining areas. These are expected to improve viability by providing a basic level of accommodation standard calibrated to the proximity of wider campus amenities, potentially reducing per-bed build costs for new developments.
In addition, the Design Guide for State-Sponsored Student Accommodation, published in June 2025, sets clear standards for publicly supported projects, allowing single study bedrooms without ensuites at a minimum of 8m², shared bathrooms, and reduced per-student kitchen, dining, and living space within clusters of 10 or more. The Strategy also promotes modern methods of construction — including prefabrication, modular construction, and panellised systems — as a means of accelerating delivery and improving cost control.
As referenced in our latest post, the Minister for Housing has signalled his intention to prepare a draft National Planning Statement under Section 25 of the Planning and Development Act 2024, with an associated strategic environmental assessment, to replace the current Apartment Design Standards Guidelines. Investors should monitor this process closely for further changes to density, design, and specification requirements.
Regulatory and compliance considerations
Increased regulation is anticipated in the PBSA sector. DFHERIS will collaborate with the Department of Housing and the Residential Tenancies Board to assist in the regulation of student-specific accommodation, with a focus on compliance and transparency. Operators should anticipate enhanced oversight.
At institutional level, each HEI is to develop its own Student Accommodation Strategy covering quality standards (safety, maintenance, living conditions), governance, pastoral support, and PBSA allocation principles. Private operators engaging through nomination agreements or site licences should expect to comply with these institutional standards.
Finally, a review of the HEI Student Accommodation Programme will be undertaken to ensure compliance with EU State aid legislation. This should provide comfort to institutional investors regarding the legality and durability of any public-private arrangements entered into under the programme.
What this means for PBSA investors
The Strategy represents a coordinated effort to close the viability gap that has constrained PBSA investment in Ireland for a number of years. The combination of market rent-setting for new developments, VAT reductions, planning amendments, standardised design, and structured HEI partnership models creates a significantly more supportive policy landscape.
There is, however, still much work to be done in operationalising these new policies. The details of the specific structure of the long-term licences will need to be provided for developers and investors to assess the proposal from an underwriting perspective. The borrowing framework for Technological Universities, the National Planning Statement and the State aid review all remain in development. Investors should monitor the evolution of the model, together with the proposed design and planning standards in advance of any formal tendering process.
For more information please contact David Fitzgerald, Partner, Aoife Smyth, Practice Development Consultant, or your usual ALG Real Estate contact.