Dig this student accommodation

Private Property South Africa
Antoinette McDonald & Angelique Arde

Early this year the director for student affairs at a university; an executive from a blue chip company; and a group of property brokers met for lunch. The upshot of their conversation was that the demand for student accommodation in South Africa was “insatiable”.

Savvy property investors will unpack that statement with all the scepticism inherent in their game.

There is a minefield of issues to consider before investing in property, especially student accommodation. Students are generally rowdy, drink a lot and have little respect for other people’s property. But, in spite of all this, student accommodation is definitely worth looking at.

In Cape Town, the demand for student accommodation far outweighs the supply. The same goes for Gauteng.

David Beattie, the principal of Chorus Realty, a specialised letting agency in Cape Town, describes the demand for student accommodation in the city as “massive”. He says that it’s not uncommon to have students crying in his Claremont offices. “It’s especially bad in January/February and October/November [the beginning and end of the academic year].”

Beattie says the average rental is R2 000 to R3 000 a month for a room in a student digs. “You won’t find anything for less than R2 000 a month, though it depends on the distance from the university. The closer you are to campus, the more you’re likely to pay.

“We have a bachelor flat that’s a five-minute walk from UCT going for R3 000 a month; a six-bedroom house for R12 750 in Claremont , a 25-minute drive from UCT; and a five-bedroom house for R11 000, in Rondebosch, which is a 15-minute drive from campus.”


Karen Geyer, the principal/owner of Chas Everitt Pinelands, says the market for student accommodation is ever buoyant. “There’s always a demand for and a scarcity of rental stock for students, which is why increasingly those who can afford it are buying properties to accommodate their children.”

Geyer says that Pinelands is a popular suburb for students because of its proximity to UCT – a 10-minute drive. She says that in Pinelands you’ll pay about R3 000 a month for a bachelor pad or a one-bedroom flat. And, of course, the closer you are to shops, the higher the rental.

Businessman Douwe Bijker owns several properties around the country, one of which he lets to students. Bijker bought the Little Mowbray property three years ago for R1,6m. The property has a three-bedroom house plus a cottage and a flatlet. He has students in the main house and a couple in the flatlet.

Although he subsidizes his bond every month, he gets R2 000 a month for each of the rooms in the house. Bijker manages his properties himself and says he has never struggled to find tenants. He advertises on Gumtree and prefers female students.

“Students can mess things up and you have to collect from many sources, which makes student accommodation very management intensive.”

South Point Management Services (Pty) Ltd, which has its headquarters in Johannesburg, owns and manages blocks of flats catering for students in Johannesburg.

Downtown Joburg is swarming with students. 2008 saw over 20 000 more learners than in previous years passing matric with a university entrance. This influx of students has put huge pressure on institutions like Wits and the University of Johannesburg to house more students than ever before.

South Point says it has created a special place for students in Braamfontein, a “home away from home”.

All rooms are fully furnished with shared ablution and kitchen facilities. Students are assured of 24-hour security and the buildings are equipped with fingerprint access systems. Each building also has TV rooms with DSTV, vending machines, pool and soccer tables, coin-operated laundry facilities, intercoms in each room, study rooms and cleaning of common areas two to three times daily. Each South Point building has a housemother who lives on site to take care of the students. The security provider is ADT and the premises are also linked to NetCare 911.

South Point has five refurbished student buildings in Braamfontein that can accommodate 1 400 students. The company has a relationship with bursary institutions that have students living in South Point.

Another company in the student accommodation game in Johannesburg is Aengus Lifestyle Properties (ALP). They provide safe, swanky student accommodation in the city. According to the company’s CEO, Richard Rubin, ALP has seen the number of students renting its refurbished apartments in central Joburg grow from 142 last year to over 1 200 this year.

Each unit is fully furnished with beds, desks, fitted cupboards, a fully equipped kitchen and stylish bathroom, and is finished with wooden floors and granite kitchen counters. Each apartment also has a fridge, 12-channel satellite, plasma TVs, and Wi-fi access. “Students are tired of staying in dormitory-style accommodation where they may have to share bathrooms and other amenities,” says Rubin. “And like any other discerning customer, they are looking for value.” Priced at between R1 500 and R2 300 per student per month, ALP’s student units cost little more than university residence accommodation.

Clearly there is money in the enterprise.

In Durban a group of professionals appear to have been handsomely rewarded for their courage in investing in the inner city to create student accommodation.

In 2006 a doctor and his lawyer chum sunk almost R2m into the purchase and renovation of Hampton Court, in the Warwick Avenue triangle area. Their money and energy transformed a squat, grey, four-storey eyesore into a fantastic students digs. The derelict block had more than a dozen flats and was home to vagrants. A vile mess of rotten wood and tons of junk had to be shovelled out of building before construction workers could actually get in to undertake the transformation.

Hampton Court is a site for sore eyes now. It is sunflower yellow and is surrounded by a wall topped with an electric fence. It is home to more than 70 students who each pay upwards of R11 000 a year to stay in the neat, well-lit building that boasts a security guard and cleaning service five days a week.

Mxolosi Dlamini is a 20 year-old first-year mechanical engineering student at the Durban University of Technology, which is a five-minute walk from Hampton Court. He says he loves his home away from his Soweto home. “For my first month in Durban I stayed across the road in that building,” he says, pointing to a nearby slum. “It was R600 a month, but it was dangerous and the guys staying there were not all students, so some of them just drank alcohol the whole day. There were 10 people in a room and it was hard to focus on my studies.”

Mxolosi and his friends consider themselves lucky to stay at Hampton Court, where they live two to a room and enjoy the use of their own private and serviced bathrooms and kitchens.“There are lots of students staying in buildings all over town,” says Mxolosi. “But this is nice. It’s quiet and the security is good. Nobody steals your stuff and we are like a family here.”

Hampton Court is clearly well maintained and its owners have the interests of the students at heart. There is a generator outside the building that was brought in, Mxolosi says, to combat municipal power outages.Since the power failed the generator is turned on between 6pm and 8am every day.

The owners of Hampton Court deserve to be rewarded for their investment. Hopefully there will be a steady supply of students to fill their beds for years to come. The investors were certainly brave to plow money into the area, which is stuck between dodgy and “getting there”.

Many of the surrounding buildings have either been gutted by fire or provide a ready canvas for graffiti artists. But there are also historic houses that have been renovated and house middle-class families. Roads in the surrounding areas are being upgraded and a new shopping centre is planned.

It’s in everybody’s interests for the success of Hampton Court to grow.

South Point says that Wits undertook a study in 2000 to research the international precedents for regeneration of universities that were faced with urban decay on their doorstep.

Wits apparently found that the condition of the university neighbourhood directly impacted on the calibre of students the university was able to attract.

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