select
|

Students flood private residences due to shortage of housing

Private residences are being inundated with applications for accommodation in 2014, amid shortages in the public sector.
 
“We are fielding an unprecedented number of calls from students desperate for quality, affordable accommodation close to campuses,” says Rob Wesselo, Managing Partner at International Housing Solutions (IHS), which has one of SA’s largest private student accommodation portfolios.
 
Wesselo says that, as students get ready to go to universities and colleges, thousands of them are realising that securing a coveted space at a tertiary campus was just the first hurdle, and that finding a place to live and study poses challenges of its own.
 
He says because of the huge and growing demand, IHS is dedicating a significant chunk of its second fund to ensuring an increased supply of student housing units in coming years. The global private equity investor expects this strategy to deliver returns in excess of 20%. IHS recently launched the second fund, IHS Fund II, in the wake of the massive success of its first fund, the SA Workforce Housing Fund, which enabled the large-scale development of affordable housing in South Africa.
 
According to the Department of Higher Education’s Ministerial Review of SA University accommodation, less than 10% of first-year students can be accommodated. However, much of the available on-campus accommodation remains dilapidated, unhygienic and unsafe. The latest statistics further show a shortfall of 207 800 university beds, and that does not include the shortfall of accommodation for private tertiary institutions. An estimated 400 000 students are currently enrolled at FET colleges, the vast majority of which do not have any on-campus accommodation.
 
“The lack of adequate and affordable student housing results in students renting inadequate accommodation off-campus, in locations that are often in appalling condition and overcrowded,” says Wesselo.
 
“Of great concern, is the fact that the poor living conditions of students have been linked to our country’s high drop-out and failure rate, due to these conditions not being conducive to studying and good health,” says Wesselo.
 
And he says that, as government funding for studies through the NSFAS (National Student Financial Aid Scheme) drives the growth in the student population, the demand for accommodation increases dramatically.*
 
Wesselo says that due to the huge demand and limited supply of student housing opportunities, IHS will dedicate a significant part of its second fund, IHS Fund II, to service this need in the market.
 
“Through our first fund, the SA Workforce Housing Fund, we have already made available 2184 opportunities in quality student developments,” he says.
 
“And in line with our philosophy to create not mere walls for shelter, but to build thriving new communities, our student housing is characterised by their pleasing aesthetics, holistic services including safety interventions, gyms, study areas, cafeterias and shuttle services, as well as sports teams and student representative bodies.”
Although student housing also offers excellent opportunities to investors, it must be approached via a sound strategy to mitigate any sector-specific challenges, warns Wesselo.
 
“We have therefore invested in a strong internal team of specialists who, together with our property management partners, are experts in student housing financing, delivery and management.
 
“We have been building a pipeline that will be focused on the provision of quality accommodation opportunities for both private and public higher education institutions, and will target the delivery of at least 5000 student housing opportunities in Fund II.”
 
* FET student funding increased from 61 700 students/R 318 million in 2010 to 222 800 students/R 2 billion in 2013


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 18 Jun 2018
      Many home sellers are motivated to appoint estate agents because they know that the agency will carry the costs of advertising and marketing their property.
    • 18 Jun 2018
      When a property is sold when it has a tenant in occupation, the questions often raised are: “What happens to the tenant if the landlord sells the property?”, and what rights the tenant will have with regards to cancelling the lease or enforcing it, says Sunell Afrika, rentals manager for SAProperty.com.
    • 18 Jun 2018
      Sellers are often caught off-guard by the expenses incurred in the selling of a property. Just like there is no such thing as a free lunch, there is also no such thing as selling your property without incurring at least some costs.
    • 15 Jun 2018
      The second quarter of 2018 has proven to be the turning point for Midrand’s real estate market, especially the upper end which started to waver towards the end of a tumultuous 2017 with a notable drop in both sales and average selling prices.
    • 15 Jun 2018
      According to data recently released by FNB, the average age of a South African home buyer has increased from 38 to 44 this year. In an attempt to help first-time buyers enter the market sooner, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, walks us through the steps of saving for your first home.
    • 15 Jun 2018
      Putting your house on the market can be a stressful process. There are so many decisions to make that will impact how quickly your house is sold and for how much you can sell it for. It’s a serious money game where you can’t afford to make the wrong decision.
    • 14 Jun 2018
      The word tourist describes someone who is visiting South Africa for a limited time and is probably not going to buy a property here – so why is the tourism industry so important to the real estate sector?
    • 14 Jun 2018
      Serengeti Estates has entrenched its status as one of Johannesburg’s most desirable addresses for a spectrum of homeowners with its launch of The Signature Residences, a new cluster village.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK