Page 35 - DPSA_SDR Vol 12 No.2 2019

SOCIAL INVESTMENTS

Student accommodation a

solid investment

Business model that keeps prices of student accommodation affordable gets a thumbs up from Government
Employees Pension Fund

SECURING a spot at a tertiary institution
is no longer the most stressful part of
enrolling as a student. These days, after Student accommodation a sought-after
financial support, the biggest concern
that occupies a student’s mind is the asset class
acute shortage of affordable student
accommodation.
Worldwide, student accommodation has grown into a well-recognised and
In its report released in August 2018, sought-after asset class – it provides steady long-term inflation-linked income
the Heher Commission of Inquiry into and is likened to other infrastructure investments.
Higher Education and Training found
that house-hunting has gradually In South Africa, the asset class is still in its infancy – it is expected to follow
become a new national sport among the global trend and attract long-term investors (like pension funds) looking
young students – and the competition is for steady cash flows.
fierce.
Contrary to popular belief, the #FeesMustFall movement did not precipitate
Strong demand has historically the shortage of student accommodation. In fact, the shortage of student
outweighed supply. This trend is accommodation predates the movement by a decade.
expected to continue, exacerbating
the already chronic national shortage. The ministerial report on student housing at South African universities,
One university in Johannesburg, for published in 2011, reported a shortfall of approximately 427 402 beds in
example, accepts 50 000 students per 2010 and warned that an estimated R100 billion would need to be invested
year, but can only accommodate 19 by 2030 to keep up with the growth in demand.
000 through its network of residences
and accredited private accommodation Demand is being fuelled by South Africa’s
providers. population boom, but also by the country’s
popularity with foreign students.
South Africa is attracting higher numbers
of foreign students than other countries
in sub-Saharan Africa. The latest
research by investment management
company Jones Lang LaSalle has
found that the number of young
adults aged 18-25 will increase to
almost 100 million by 2020, and that
the demand for new, purpose-built
student accommodation is set to top
500 000 beds in the next five years.

Volume 12 No.2 of 2019 | SERVICE DELIVERY REVIEW 33