Student housing wager
A shortage of suitable accommodation, and the state’s NSFAS aid scheme underpin, make for a compelling case
● Growthpoint Properties, the JSE’s largest SAbased property stock, is betting on the global “beds and sheds” investment theme with the launch of a R2bn student housing fund.
Besides having stakes in a multibillion-rand listed portfolio of mostly shopping centres, offices and industrial buildings across SA, Australia, the UK and Eastern Europe, Growthpoint has successfully launched two other specialist unlisted property funds in the past five years: a R3.2bn health-care fund and an R11.7bn Africa (excluding SA) one.
The sector heavyweight now also hopes to gain a first-mover advantage in SA’s fledgling student accommodation sector.
In partnership with developer Feenstra, Growthpoint has already assembled a portfolio of 5,000 student beds, housed in a real estate investment trust (Reit) — though it is unlisted for now. The seed portfolio is spread across seven buildings, all within walking distance of the Uni
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Growthpoint Properties – weekly – based to 100 versity of Pretoria in Hatfield and the University of Johannesburg in Auckland Park. Monthly rentals vary between R4,500 and R6,500.
George Muchanya, Growthpoint’s head of corporate finance and the interim head of the new student Reit, expects the portfolio to grow to at least 22,000 beds worth R10bn-R12bn in the next five to seven years. That will provide the right critical mass to consider a separate JSE listing, he says.
The initial portfolio has been funded through R550m of debt and R1.45bn in equity, of which R240m comes from Growthpoint, R160m from Feenstra and the balance from third-party investors — mostly local family offices and investment holding companies. Growthpoint will maintain a shareholding of between