A direct provision centre in Limerick has been earmarked for development into a suite of student apartments.
Mary Immaculate College has confirmed plans to develop the former Westbourne Holiday Hostel into a 68-bed student apartment building.
The centre was initially shut over health and safety fears, later taken over by a vulture fund, and purchased by a Galway developer firm.
Mary I said it hoped the development would help bridge a gap in student accommodation in the city, while increasing its student accommodation to almost 200 rooms.
Last week, it emerged third level students were forking out up to €400 per week to stay in hotels.
Mary I said it was in the “advanced stages” of a deal to purchase the centre from Alber Developments.
The centre was previously run by Westbourne Holiday Hostel Ltd, whose loans were sold by NAMA to a US “vulture fund” subsidiary, which previously served eviction orders to tenants of the upmarket Limerick Strand Apartment Complex.
The direct provision management contract was terminated by the Department of Justice on January 25, 2017, after claims the Westbourne management had failed to ensure the health and safety of residents.
The Department stated its decision to close the 64-bed centre was after its requests that health and safety standards be met were ignored.
Westbourne was owned by Kenny Commercial Holdings Ltd, a subsidiary of Kenny Investment holdings which entered NAMA as a going concern on December 16, 2020.
The company reported losses of €1.37m at the end of March 2014, and its borrowings were taken on in July 2016 by OCM EmRy Debtco DAC, a subsidiary of Oaktree Capital Management Ltd.
At the time Oaktree was selling upmarket apartments in limerick owned by Sova Properties Ltd, a subsidiary of Lalco Holdings, which entered NAMA in 2010 with net liabilities of €64m and bank loans of €117m – these borrowings were sold to OCM Em Ru Debtco DAC.
In January 2017 Sova withdrew eviction letters it had sent to tenants at the Limerick Strand Apartment Complex, but continued to sell apartments on behalf of Oaktree.
John Randles, Mary I’s Accommodation Manager confirmed the college was in “advanced stages” of negotiating the purchase of the building, adding “we’ve been trying to get our hands on the property for ten years”.
Mary I also provides 36 student rooms at its campus in Thurles, Co Tipperary; 90 units at Courtbrack Avenue, near the Limerick campus.
Mr Randles said the college hoped the additional 68 units would be ready to go ahead of the start of the next academic year, in September 2022.
“We’re in negotiation with Alber to provide 68 bedrooms, small apartments, with four bedrooms in each. Each apartment will have two shower rooms and a kitchen/sitting room,” Mr Randles added.
“The COVID-19 pandemic has decreased the market enormously, because people who own those student houses couldn’t wait a year and half to wait to see if the students were going to go back to their properties, so they had to rent to the private market — that’s why students are at a loss now.”
Mr Randles explained that in a normal year, pre-Covid, he would have normally have a list fo 100 rental properties for students, but that this year he was forced to place adverts in local newspapers to attract landlords after only 39 properties were available for students.
“They had mortgages to pay so you cant blame them for renting to the private market.”
There are 5,000 students currently studying at Mary I, however the number of students who are staying in hotel accommodation is not known.
Mr Randles said he understood Alber would carry out the planned refurbishment works at the former Westbourne centre, as part of the new development deal.
Alber did not respond to requests for comment.
