April 30 2024 15:00
Growthpoint Student Accommodation REIT (Real Estate Investment Trust) has injected R1.5bn into student housing since JSE-listed Growthpoint Properties launched the business around two years ago.
This arm of Growthpoint which the company aims to list separately in the near future, has added 4,000 new student beds across 12 residences in Cape Town, Johannesburg, and Pretoria, taking its portfolio value to around R3.5bn. By 2025, with two upcoming developments, it plans to expand to 10,400 beds, Growthpoint said.
Amogelang Mocumi, fund manager at Growthpoint Student Accommodation Holdings said there as a “remarkable 98% occupancy rate” for the 2024 academic year, surpassing the previous year. The newly constructed purpose-built properties were developed by Growthpoint Properties and Feenstra Group. South Africa faces a severe student accommodation supply shortage every year. According to the National Student Financial Aid Scheme, the shortage lies between 260 000 and 300 000 beds.
Established in December 2021 by Growthpoint Investment Partners, Growthpoint Student Accommodation REIT says its specialises in “student-centric properties designed to enhance the university experience and promote student success”.
Two new additions, branded Thrive Student Living, launched in 2024. Horizon Heights in Johannesburg boasts 99% occupancy among students from the nearby University of Johannesburg and the University of the Witwatersrand. Fountains View in Pretoria has 98% occupancy and caters primarily to students from Sefako Makgatho Health Science University (SMU) and the University of Pretoria’s Groenkloof campus.
Growthpoint Student Accommodation Holdings is developing two properties for the 2025 academic year: a R300m, 900-bed property in Braamfontein and a R200m, 500-bed property in Parktown, both targeting Wits University students. Plans for a development near the University of KwaZulu-Natal’s Howard College Campus in Durban are underway for the 2026 or 2027 academic years.
Growthpoint aims to achieve long-term returns of 13% to 16%, with ambitions to grow its portfolio to R12bn in assets and pursue a stock exchange listing within seven years.
Thrive Student Living amenities include study areas, games rooms, and essential services like backup power and water. The Student Life program provides 24/7 academic, physical, and mental health support, as it aims to create a conducive environment for student success, offering peace of mind to parents and bursary providers.
There are no companies solely focused on student accommodation developments which are listed in SA. The likes of SA Corporate Real Estate and Octodec Investments owns some student housing. Redefine Properties owned half of student housing developer and provider, Respublica Student Living for a number of years. Stag African run my MD John Schooling, develops student accommodation in Cape Town. Student housing requires intense management. Students might be obligated to rent accommodation for an academic year but this means they often do not want to rent accommodation during the December holidays.
alistair@propertyflash.co.za
