Deepening student housing crisis may be an investment opportunity
Our friends at EasyProperties shared this interesting article with us. Always on the lookout for great opportunities, we know you will enjoy this update :
The demand for student accommodation in South Africa is at an all-time high, with more than 500 000 students in need of dedicated beds located close to their respective universities, according to a recent study conducted by the International Finance Corporation (IFC). This shortage is expected to grow by more than 50% over the next three years as the government’s ambition to increase enrolments outpaces the development of new student housing.
This housing shortage is not only a stumbling block to expanding access to tertiary education in South Africa but also a missed opportunity for investors. Despite global economic concerns that are currently weighing on investors in most sectors of the domestic property market, those invested in student accommodation continue to reap solid returns. “Despite one or two shifts in recent years, student accommodation remains a very positive property sector, particularly given that demand for rentals in this segment continues to consistently outstrip supply,” said Makhosini Ndlovu, the product head at FNB Commercial Property Finance.
However, Ndlovu was quick to point out that not all student accommodation is created equal, and there are some fairly significant differences in how investors and developers should be approaching the sector depending on the type and location of the universities their accommodation services.
One company that has recognized the potential in this market is Volley Student Living. According to Etienne Maritz, a founding partner of the company, there has never been a greater demand for student housing, making this a perfect time for investors. “There was a huge demand for student housing before the pandemic, but the end of the State of Disaster has exacerbated an issue that has been over two years in the making. With 26 universities and 50 recognized colleges in South Africa, the demand far outweighs the supply,” Maritz said.
To meet this demand, Volley Student Living has launched Volley Brooklyn, a Pretoria-based development that offers world-class amenities and services and has already shown its potential in the market. The demand was evident as 88% of the development was sold out in the first 16 minutes after launching on 14 March 2023. Volley Brooklyn is an intimate collection of 41 design-led and curated apartments, meticulously and methodically crafted by award winning architects Boogertman and Partners.
EasyProperties snatched up the last 8 units in this development giving investors the opportunity to tap into a market that is not only growing but also providing a much-needed service to students. The development’s prime location only 950 meters away from the maingate of the University of Pretoria, means that students can easily access the University of Pretoria, as well as other amenities such as shops, restaurants, and public transport.
In conclusion, the demand for student accommodation in South Africa is a significant issue that presents an opportunity for investors. The potential for growth in this sector is evident, and companies like Volley Student Living are providing much-needed solutions such as the Volley Brooklyn development. With the market growing, now is the time for investors to take advantage of this opportunity and invest in student accommodation.