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Monday Jan 27, 2014

Student quarters at a premium

Private residences are being inundated with applications for student accommodation this year, amid shortages of residences at tertiary institutions.

'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 the largest private student accommodation portfolios in South Africa.

Wesselo says that as students get ready to go to universities and colleges, thousands are realising that securing a coveted place on a tertiary campus is just the first hurdle, and that finding a place to live and study poses challenges of its own.

Because of the huge and growing demand, IHS is dedicating a significant chunk of its second fund to ensuring there is a greater supply of student housing units. The global private equity investor expects this strategy to deliver returns in excess of 20 percent.

IHS has launched its second fund, IHS Fund II, in the wake of the huge success of its first fund, the South African Workforce Housing Fund, which enabled the large-scale development of affordable housing.

According to the Department of Higher Education's Ministerial Review of South African university accommodation, less than 10 percent of first-year students can be accommodated. Much of the on-campus accommodation is dilapidated, unhygienic and unsafe.

The latest statistics also show a shortfall of 207 800 university beds and this does not include the shortfall in accommodation for private tertiary institutions.

An estimated 400 000 students are enrolled at further education and training (FET) colleges, most of which don't have any accommodation on campus. 'The lack of adequate and affordable student housing results in students renting inadequate accommodation off-campus, in locations that are often in appalling conditions and overcrowded,' Wesselo says.

'Of great concern is that the poor living conditions of students have been linked to high drop-out and failure rates as these conditions aren't conducive to studying and good health.'

Wesselo says that, as government funding for studies through the National Student Financial Aid Scheme drives the growth in the student population, the demand for accommodation increases dramatically.

Funding for FET studies increased from R318 million for 61 700 students in 2010 to R2 billion for 222 800 students last year.

Wesselo says that because of the huge demand and limited supply of student housing opportunities, IHS will dedicate a significant part of its second fund to servicing this need.

'Through our first fund we have made available 2 184 opportunities in quality student developments,' he says.

'In line with our philosophy of building thriving new communities, rather than mere walls for shelter, our student housing is characterised by 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 for investors, it must be approached through a sound strategy to mitigate any sector-specific challenges, Wesselo says.

'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 focus on the provision of quality accommodation opportunities for private and public higher education institutions and will target the delivery of at least 5 000 student housing opportunities in Fund II.'

Wesselo says the importance of good student housing cannot be overemphasised. 'Many students seeking accommodation come from disadvantaged backgrounds, but they can access quality off-campus residences with the help of the National Student Financial Aid Scheme.

'The staff at these residences then have the responsibility of educating students in areas of life management, such as paying their rent on time, getting along with their neighbours, taking care of facilities and managing their time so that they get to the bus on time.'

At IHS private residences, this is achieved through providing and enforcing house rules. Students are encouraged to participate in sporting activities on campus and residences sponsor soccer and netball teams.

Other realities of accommodating bursary students on a large scale include ensuring that students are comfortable about approaching staff concerning such issues as not being able to afford food, personal problems and feeling overwhelmed by the demands and stress of studying. Many tertiary institutions run feeding schemes and the IHS residences partner with these to ensure students do not starve their way through their university years.

Residences need to interact with universities to include students in activities such as sport, academic monitoring and recognition, as well as social functions.

Ensuring there is transport to and from the campus is also essential.

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