A UK-based student accommodation firm is to seek planning permission for a €60 million residential development at Dorset Street, Dublin 1, after buying a large site there for more than twice the guide price.

The Student Housing Company (TSHC), owned by the global asset management firm Oaktree Capital Management, is hoping to secure planning approval for between 550 and 600 student bed spaces on the site of 0.57 of a hectare (1.41 acres) opposite the Maldron Hotel which has remained vacant for more than a decade. It was originally offered for sale last summer at €2.5 million but following the high level of interest in it mainly from companies promoting student accommodation, the price kept rising until it was knocked down to TSHC at €5.1 million, according Simon Plunkett of selling agents Douglas Newman Good.

TSHC is already developing a student facility with 471 bed spaces as part of The Digital Hub on Thomas Street. The €40 million accommodation is due to be completed in time for the 2016/2017 academic year.

The company also operates student facilities in Bristol, Edinburgh, Liverpool and St Andrews in the UK. Several other overseas companies specialising in similar developments have been bidding on other Dublin sites located within walking distance of third-level educational colleges.

The Dorset Street centre is less than 10 minutes' walk from the planned new DIT Grangegorman campus. It is also close to the Mater Hospital and the Temple Street Children's Hospital and is alongside the route proposed for the Luas cross-city line.

Rents

The rush to provide student accommodation follows the surge in apartment rents in the city over the past five years which has put most of them outside the reach of students.

A large number of students have had to settle either for flats in the outer suburbs or shared accommodation in some of the older houses in the city.