Tauranga's CBD looks set to get an injection of nearly 400 live-in students with the announcement of plans to build a high-rise hostel in Durham St.

QP Property Holdings has lodged an application with the council for a $40 million tertiary student accommodation complex, a stone's throw from where earthworks had begun for the $90m university campus.

Company director John McColl said construction was due to start early next year, with completion timed to coincide with the campus' opening semester in 2020.

"This student accommodation development is a very important part of the tertiary education precinct puzzle and is inevitably going to bring vibrancy and energy to the city centre."

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The 12-level building would have 392 rooms set around state-of-the-art communal areas, but no carparks.

Mr McColl said the proximity to the campus and the council's vision for cycling, walking and more people using public transport had been the basis for acquiring the land.

"Consequently, there isn't a requirement for carparks."

The building would also include a cafe, ground floor retail, games room and 124-seat dining hall and commercial kitchen. There would be a 50/50 split between catered and non-catered students.

Waikato University senior deputy vice-chancellor Professor Alister Jones said the complex ticked all the boxes for parents who wanted their children to live in a safe, secure and inviting environment.

Tauranga Mainstreet chairman Brian Berry of the Property Managers Group said there was no planning requirement for downtown developments to provide carparks and he hoped that most first-year students would not own cars.

Mr Berry said the students would add a lot of vibrancy to the city centre and, together with the growth of the tertiary sector in the CBD, it was an exciting time for Tauranga.

Tauranga Mainstreet's immediate past chairman, Glenn Tuck of Broncos, said he did not see the absence of carparks as a big issue.

His recollection of university days at Otago was that at least 90 per cent of students in his hall of residence did not own a car. "I don't see it as a biggie at all."

He looked forward to the development of the hostel. "It's great; it will add more vibrancy to the city."

Gift and souvenir retailer Bill Campbell estimated that the hostel would create a demand for about 45 cars, based on 5 per cent of students owning a vehicle plus the staff and cooks needed to run a hostel of that size.

Mr Campbell said it highlighted the urgent need for the council to start work now on the planned carpark building in Harington St. With parking already under huge stress in the downtown, he said the CBD was "in the poo".

He said the chickens were coming home to roost on the council's decision to abolish carpark minimums for new developments.

"Retailers are bearing the brunt. Customers need a park, and if they can't find one, they will not come back."

Mayor Greg Brownless shared the opinion that a lot of the students would be too poor to own a car although he had no doubt that some would need parking.

Deputy Mayor Kelvin Clout welcomed the development, saying more people needed to be living in the downtown.

"We need more people to liven the place up...it will be good for business."

He referred to the $7m 280-space private carpark building under construction behind ANZ Centre on the corner of Cameron Rd and Elizabeth St. Richard Cashmore of Troop Investments said four of the five levels had been leased.

A check by Bay of Plenty Times Weekend with student parking spaces in Auckland University's city campus halls of residence showed they offered "limited parking", no parking, or 13 spaces for University Hall.

Waikato University's three halls of residence offered between 11 and 15 on-site reserved parks. Students also had the option to pay for a licence to park in any of the public carparks.

Tauranga's new campus would open in 2020 with a roll of about 700 fulltime students, rising to 1500 once stage one was completed.

Fast Facts
- Building size 12,000sq m with 392 bedrooms
- 100sq m of communal areas per floor
- Designed for high-tech industrial feel
- Parking for bikes and scooters
- Located at 145 and 153 Durham St