Student accommodation has become one of the most recession-proof, interest rate-proof and resilient property investments in southern Africa, and could be big in Namibia too.
According to a report by IOL, this is particularly true where tertiary education institutions proliferate and the income stream from these investments is as proverbially certain as death and taxes, says High Street Auctions director Greg Dart.
In South Africa and Namibia, the government student financiers fund hostel fees. But universities do not always have enough hostel facilities.
South Africa, for example, has a shortage of some 800 000 beds.
“The drastic overall shortage of beds combined with feature-driven demand means the income potential is wide open for developers, in particular,” Dart said.
If a developer can find a building with conversion potential in proximity to a large tertiary institution, he says “the sky’s the limit”, particularly when – for instance – a number of cleverly-designed micro-apartments are factored into the renovation.
Dart said this market segment is driven by students’ desires for the same levels of privacy they enjoyed while living at home, especially when it comes to bathrooms.
Parents also want to know that their student children have 24/7 security, uncapped Wi-Fi, reliable transport links to and from university, and that they’re surrounded and supported by an education-focused, like-minded peer group.”
There’s historically been a “massive gap” in student accommodation requirements, says Grant Smee, managing director of Only Realty Group.
He believes that there has been an uptick in developers focusing on the student accommodation space, saying this is being seen particularly in areas like Durbanville, Stellenbosch, and coastal areas like Gqeberha.
The second big issue is that of affordability. Will students be able to afford to live in these in-demand areas?
This is where government and university subsidies must step in, as it’s difficult for developers to justify projects that will not be profitable. A balance must be struck.
WHERE SHOULD THEY BE?
Preferably, student accommodation needs to be as close as possible to the campuses their students attend, not only for access to classes and facilities, but also because the campus is the hub of the cultural life of students.
WHAT SHOULD THEY HAVE?
In terms of interior offerings, students need places to study – either in their rooms or in dedicated quiet common areas, places to socialise, and amenities such as laundry rooms and good security within the building.
“High-speed internet is now non-negotiable with the rise of remote and hybrid learning. With the rise of load-shedding once again, I would also urge developers to consider generators, uninterruptible power supply, or inverters, to allow them to continue studying when the electricity goes out.”
In addition to uncapped, super-fast Wi-Fi, “great security and safety features”, furnished properties get filled faster than unfurnished ones.
– Additional report, IOL News
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