Midrand Varsity Lodge, one of the PCI Rentals existing developments
According to the Department of Higher Education’s Ministerial Review of South Africa’s University accommodation, less than 10% of first-year university students can be accommodated. In addition, much of the available on-campus accommodation is dilapidated, unhygienic and unsafe.
Ken Reynolds, Regional Executive of Nedbank Corporate Property Finance in Gauteng says that according to the Department of Higher Education in 2009, it was confirmed that the shortage is extreme and that the lack of supply of student housing is one of the primary causes for poor performance and the high dropout rates at some universities.
“According to statistics from the Department, out of a student population of 530 000, there is currently only enough student accommodation for 100 000 students – this barely meets 18 percent of the demand. As the demand for student accommodation far outweighs supply, there are excellent investment opportunities available in this market. As a result, we may see the establishment of a new REIT dedicated to providing student accommodation in the future. And, although the buy-to-let market is currently depressed, student accommodation is one section of this market that is proving to be an excellent buy-to-let option for private investors, usually for a relatively small capital outlay.”
Nedbank Corporate Property Finance has partnered with a number of developers that are focusing specifically on addressing this critical student accommodation shortage. It announced in June last year that it provided finance to CampusKey to provide close to 500 additional beds at the University of the Free State and the University of Pretoria. Also financed by Nedbank were 1 590 additional beds for the University of Johannesburg and University of Pretoria which were constructed by Respublica in time for occupation by students at the start of this academic year.
Now Nedbank Corporate Property Finance is providing PCI Rentals (Pty) Ltd through its subsidiary , JJP Varsity Lodges, with R221 million to provide 2574 additional beds to tertiary institutions around the country, with at least another 2000 to be developed in the near future. Accommodation provided by this funding includes:
· Meadowlands in Newcastle, offering 289 two bedroom units that are across the street from the newly developed Curro (Meridian) School and in close proximity to Majuba College.
· 1115 beds in Riviera and Phillip Nel Park in Pretoria, which provide much needed accommodation to University of Pretoria, Tshwane Institute of Technology and SANDF students.
· 530 beds in Brixton and Hursthill in Johannesburg that cater for University of Johannesburg and Helen Joseph Academic Hospital students. 270 of these are already occupied while the balance is currently under construction for completion by February 2015.
· 450 beds in Midrand which provide accommodation to the students of the Midrand Graduate Institute (MGI).
· 190 Beds in Potchefstroom for students of The North West University and MGI.
PCI Properties, the holding company of PCI Rentals, was founded in 2007 and is a private property investment company that focuses on niche areas of the rental market including student accommodation. PCI Rentals is co-owned by Inshare (Pty) Ltd, through its subsidiary Insure Group Managers Ltd, a public company specialising in insurance premium collections and business solutions for brokers. PCI Rental’s student accommodation business is managed by JJP Varsity Lodges. Hansie Prinsloo, co-owner and managing director of JJP Varsity Lodges, is a seasoned specialist in residential developments and student accommodation with over 25 years’ experience, Currently JJP Varsity Lodges manages in excess of 5000 student beds in South Africa.
Reynolds says that Nedbank is pleased to be in a position to partner with companies such as PCI Rentals to help alleviate the severe shortage of student accommodation in South Africa. “PCI Rentals, through its subsidiary JJP Varsity Lodges, has many years’ experience and is one of the market leaders in student accommodation. We are proud to have provided agile solutions for the company that makes available better infrastructure at some of the country’s leading tertiary institutions.”