Private sector needs to do more in this line
Private property development for student accommodation remains limited in Cape Town, despite the potential this sector holds for investors.
While there has been an increase in some parts of Cape Town, such as the southern suburbs, where University of Cape Town students are catered for by several private property developers, the Department of Higher Education and Training says accommodation is limited for students at other universities and technical and vocational education and training colleges in Cape Town and the rest of the province.
“For students at the other two public universities in Cape Town, the Cape Peninsula University of Technology and the University of the Western Cape, the private sector provides a very limited amount of accommodation,” says the department.
The private sector has developed student residences and private apartments for students at Stellenbosch University.
Going into 2018, the department says current demand for accommodation continues to outstrip the supply.
“This year, there are 116128 students – preliminary and unaudited – registered at the four universities, but there are only 22150 beds available.”
“This development will double the total number of just over 2500 beds at UWC in a single project. It will greatly alleviate the plight of students who live more than 60km away from the campus and who currently have to travel up to three hours or more to get to class every day.
“The UWC project will help the department to plan, fund and develop similar large student housing projects at other universities throughout the country,” the department says.
However, more can be done by the private sector to develop properties for students. Developers can work more closely with universities and colleges to develop student housing that is affordable for the majority of students who have to pay rent from their student loans or bursaries, the department believes.
“Developers generally build student accommodation for affluent students whose families can pay R6 000 or R7 000 or more a month for a studio flat close to campus.
“However, most students can’t afford high rents and end up living in backyard rooms far from campus, and travelling long distances by train and taxi.
“The private sector could play a significant role in financing and developing affordable, accessible, safe and decent student housing on, or very close to, campuses in partnership with universities and colleges.”
Student accommodation was highlighted by the Pam Golding Property Group as a “hot spot” in property this year.
According to its chief executive, Dr Andrew Golding, such property close to universities and tertiary institutions is proving increasingly popular.
This includes conversions of houses which are let by the room, giving investors significantly greater returns compared to a single lease over the property.
“There is a severe shortage of student housing in South Africa, a trend which is evident in many metros in prime global cities.”
Activity in the sectional title market in Stellenbosch central remains brisk, Golding says.
Premium properties for such development are on the “Green Route” patrolled by campus security. “Central blocks with excellent security, quality finishes and a mix of tenants are sought after.”