- Private placement to raise R1.7 billion.
- 25% – 30% of ownership anticipated to be in direct black hands.
- Portfolio of twelve high-quality, well-located assets valued at R2.25 billion and 6 500 beds under transfer.
- Fully internally managed (property and asset management).
- Immediate acquisition pipeline of R2.5 billion identified.
- Addressable market of up to 200 000 beds across high-growth nodes.
- Approximately 50% of leases signed with large universities. Remaining 50% through bursary schemes and sponsors/parents.
- ISAF Ithubalethu (focussed Retail BEE SPV) to house and promote broad-based black shareholder focus.
- Entrepreneurial management team with significant listed real estate experience.
Inkunzi Student Accommodation Fund is set to become the JSE’s first specialist student housing REIT when it lists in September 2017.
At listing, Inkunzi’s R2.25 billion portfolio will comprise twelve high-quality assets totaling 6 500 beds mostly located within walking distance from the University of Pretoria, the University of Johannesburg, Vaal University of Technology, North West University, and the Nelson Mandela Metropolitan University in Port Elizabeth.
Kameel Keshav, Chief Executive and founder member of Inkunzi comments:
“We’re very excited about this listing as it addresses one of South Africas key issues of student accommodation as well as drives a strong socio-economic aspect in having a 25% – 30% direct black ownership. Inkunzi brings something unique and fresh to the listed real estate space, offering investors direct access to a counter-cyclical asset class”.
“Our high occupation rates, supported by a constant supply and demand imbalance, will allow us to achieve stable income and solid, above-inflation rental growth”.
“Given the high demand for quality student accommodation, I believe that Inkunzi’s offering and support framework will establish it as the go-to brand for universities, financial aid schemes, students and investors alike”.
“At the same time, we’re focusing on creating a platform for true broad-based empowerment through our staff incentive scheme facilitating the opportunity for staff to own a stake in the company they work. This means from the CEO to the security guards, cleaning staff etc. at the assets will all own a share in ISAF.”
According to The Department of Higher Education and Training, there is a shortfall of approximately 250 000 beds in the country. This increases to approximately 750 000 if Technical and Vocational Training Colleges are included. Based on international studies in mature markets, student accommodation caters for less than 20% of tertiary students enrolled at universities.
This means that for every one hundred students admitted at a university, only between seven and eighteen can be accommodated on campus. Inkunzi believes that the addressable market value of the opportunity in South Africa, on a conservative basis, ranges between R75 billion and R125 billion, growing at 5% per annum.
Owen Nkomo, Chief Investment Officer and founder member explains: “Our investment philosophy is to maximize income and net asset value growth by acquiring good quality assets across the country. At listing our loan-to-value is expected to be around 25%, providing some headroom for growth”.
“We have identified an acquisition pipeline of R2.5 billion through the first right of refusal we have with current developers we are acquiring our assets from. We will also partner with developers on greenfield projects”.
“What we’re building here is a brand that stands for value and support. Inkunzi’s slogan of “The future lives here” is not only aspirational but indicative of the environment we offer our students to grow and thrive in”.
“Amenities include generator back-up power, wi-fi, study rooms with facilitators for group learning, quiet rooms and mentorship programmes. This is balanced by green areas, gyms and other recreational facilities, all access controlled through biometric security.”
Accommodation range from single or multi-sharing units all with en-suite bathrooms and are either partially or fully furnished. Monthly rentals range from R1800 to R6600.
The listing is by way of private placement and not open to the public to subscribe. Individuals wishing to participate should contact their broker or Inkunzi Wealth Group for further information.