Catalyst for Construction Growth: Student Accommodation

1st October 2020

By: Creamer Media Reporter

     

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One would be hard pressed to find a more attractive investment opportunity than purpose-built student accommodation. 

While property developers and construction firms rush to meet the demand, there is still a chronic shortage of accommodation. Earlier this year, the Department of Education acknowledged a need for approximately 300 000 more beds to accommodate students across the country. 

Despite the ongoing demand, challenges around funding, approvals and accreditation are still a hinderance. 

A No-Brainer

For investors on the other hand, this opportunity is a no-brainer. Student accommodation presents less risk than residential and commercial property investing. Overheads and rentals are split between many tenants and rental payments are often made by corporate sponsors and parents (or guardians) for peace-of-mind.

While it may come as a surprise, TSK Bartlett, Managing Director, Keegan Bartlett says that COVID-19 has not put a dampener on demand. “However, this demand is not always met by supply. Investing in student accommodation can cost millions, if not billions, and in the current climate funding can be a challenge. Adding to this is affordability by students in some cases,” 

“Based off of recent local statistics, the occupancy rate sits at almost 100% across the country”.  

TSK Bartlett is currently building a 2000-bed student accommodation high-rise in Johannesburg Central; Bartlett believes that further investment into projects of this nature could be the boost that the construction industry needs. 

“For the most part, infrastructure development has been put on hold so student accommodation could be that much-needed catalyst for growth in the interim”. 

Addressing the affordability issue by students, Bartlett notes that it is up to the industry and the public sector to find a mutual resolution. “Building safe and affordable housing is critical. Incorporating green building technologies will also help to reduce monthly expenses and maintenance costs”.

Industrial Builds Continue to Soar

In addition to the increase of student accommodation, Bartlett notes that large-scale industrial builds are still on the rise. “E-commerce is one of the key drivers behind this trend, and we look forward to observing this continued and unexpected growth during this unpredictable time,” he concludes.

 

Edited by Creamer Media Reporter

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