Real Estate Investor Magazine South Africa March 2013 | Page 32
GETTING STARTED
Student housing
BY CAJ VAN ZYL
Tapping into a Growing Market
W
ith the change in our democracy
and our diff icu lt employ ment
env ironment, t he h istor ica l ly
disadvantaged are now flocking to get educated
and gain skills at tertiary level. This all is great
news for the student accommodation market.
Most universities a re inundated w ith
applications from learners. These institutions
have not kept track with the growing demand
for student accommodation and can only
offer limited space on campus to the these
learners. As a result of this, the private student
accommodation market has grown exponentially.
“This is an untapped market, particularly
in emerg ing economies,” say s CEO of
student accommodation specialists, Aengus
Investment Proper ties, R icha rd Rubin.
“Whether you’re in Rio de Janeiro or Accra,
there is a severe shortage of safe, secure,
affordable accommodation for students globally.
It’s proving to be an excellent investment
opportunity regardless of macroeconomic
conditions affecting the property environment.”
Historically, accommodation for students
has been provided by tertiary institutions
themselves, but as operating budgets are slashed
and property becomes increasingly expensive to
acquire and maintain, many universities are
outsourcing the provision and management
of student accommodation to independent
companies and in many instances partnering
with them to do so.
The largest component of learners nationally is
now on the NSFAS (National Student Financial
Aid Scheme), a multi-billion rand government
fund put in place to assist students with funding
at tertiary level. The scheme provides a “soft”
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March 2013 SA Real Estate Investor
loan to the student to cover expenses such as
accommodation, tuition and pocket money. The
loan needs to be paid back once the student gets
employment after his/her studies.
You would typically find high numbers of
NSAFS students enrolling at the tertiary
institutions in areas such as Johannesburg,
Pretoria, Bloemfontein, Durban and Port
Elizabeth. Cape Town, Stellenbosch and
Potchefstroom have larger numbers of private
students and also much higher asking prices
for student accommodation. This demographic
prof ile lays the foundation for st udent
accommodation investments and hot spots.
Requirements for accommodation
The 2011 ministerial report on student housing
makes scathing conclusions on the state of
student accommodation currently available and
the severe shortage of quality accommodation
nationally (currently the national shortage is
estimated at 200,000+ beds with over 500,000
registered students). As such, a variety of
minimum accommodation standards have now
entered the equation and various departments
such as the Department of Health, local
city councils and the institutions themselves
are now actively involved [? ?Y?[][?? B?[? \? ?K?Y?[??Y[??\?? ? [H?[??[??[?K\???X[?Z]?[?\??H H ? Y[? ?\??Y[????Y?][?[ H[? H?YY??H[?H??X[?[? ?Y?[]Y\ ??X?\??X??YH\ \?[? ??[???[??\?\?? [?H ?[?[? H??[][?B??X?H8?$?H ?X?H[????Y?H H??[??\?\????] H??[??[[?H?ZY[[?H?? ? Y[??X???[[?][?\?X?\?Y[? ?H ?X?B??\]Z\?\? ] [?H\ H?????[? ]\?H ?Y? ??H ?\?Y[?X[ ??Y H ??\? H
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