Real Estate Investor Magazine South Africa Real Estate Investor Magazine - November 2017 | Page 34

STUDENT HOUSING
Specialised Fund Offers Growth
The case to be made for student accommodation
BY MONIQUE DU TOIT
KAMEEL KESHAV
CEO and co-founder of Inkunzi
Student Accommodation Fund.
S
outh Africa is home to 26 universi-
ties, several of which are spread out
over several campuses. With this
comes thousands of students enrolling
each year. In most cases, demand far out-
weighs supply when it comes to accom-
modation. We saw several protests erupt
over students’ unhappiness with tuition
and accommodation fees - leaving many
without a safe place to call home.
Speaking to Kameel Keshav, CEO
of Inkunzi Student Accommodation
Fund (ISAF), we set out to find out what
makes student accommodation a good
investment. The fund, soon to be listed
on the JSE, is solely focused on student
housing - a relatively unique approach to
real estate investing. This, Keshav claims,
is where the future of real estate investing
lies: “I strongly believe that the largest
opportunity in the South African prop-
erty sector is the shift of investment into
more specialised funds. We have recent-
ly seen a few companies successfully list
and since traded strongly in the property
space, all with focused specialisation.”
ISAF aims to bring more affordable
housing to students, offering them the
opportunity to stay at some of the best
properties on offer at reasonable rates.
Keshav emphasises his company’s focus:
“We’re not just another property com-
pany that will provide a good return for
shareholders — its vision is very much
What to look for
BILL RAWSON
Chairman of the Rawson
Property Group
32
Bill Rawson, Chairman of the Rawson
Property Group, shares his thoughts on
this niche market:
“South Africa is attracting higher
numbers of foreign students and from
other countries in sub-Saharan Africa,
where the latest research by JLL has
found that the number of young adults
aged 18-25 will increase to almost
100m by 2020, and that the demand
for new, purpose-built student accom-
modation is set to top 500 000 beds in
the next five years.
So now the question becomes not
whether to invest, but how quickly one
can identify and acquire suitable prop-
erties. This is becoming increasingly
obvious in the major student accom-
modation markets like Stellenbosch,
Pretoria, the Southern Suburbs of
Cape Town and the parts of Johannes-
NOVEMBER 2017 SA Real Estate Investor Magazine
also focused on the fantastic socio-eco-
nomic benefit the company will bring to
South Africa, which I believe is each of
our responsibilities as South Africans in
a young democracy.”
What makes a great
property investment?
• Location is key
• The quality of the asset being ac-
quired
• The price at which it’s being acquired
and, importantly, bottom line returns
• The sustainability of net income
growth is critical
• Look for asset optimization oppor-
tunities
• Competitive advantage the asset will
hold against others of its class close
by – what makes this property the
preferred choice for a tenant versus
any other is the key question
• Strong cash flow considerations for
the property (rental collections/low
or no bad debts history)
burg surrounding Wits and the main
UJ campus.
In these areas, the student accom-
modation market is no longer season-
al, with the bulk of sales taking place
from August to December. Now there
is demand all year round, and parents
make up the increased percentage
of buyers. In order to ensure the best
returns, it’s important to take note of
what students - or their parents - are
most likely to rent.
This can generally be summed up as
clean, safe accommodation within easy
reach of campus at an affordable price.
In our experience, the most consistent
demand is for newly-built and pre-
owned one and two-bedroom sectional
title apartments, with high tech secu-
rity, parking and good access to shops
and other amenities as well as campus.