Eris Property Group has announced the successful raise of an initial R500 million for its social impact student accommodation company from a consortium of domestic and international investors including Momentum Metropolitan Life and the Eskom Pension and Provident Fund.
Leveraging on its existing skills within property developments and management to alleviate the need for student accommodation shortages in South Africa, Eris has culminated in the development of its sub-brand RISE Student Living. The RISE Student Living property management service is completely tech-driven and the entire leasing process, encompassing all stakeholders involved, happens digitally.
The investment vehicle’s first investment was Units on Park, Hatfield, a 988-bed student accommodation property developed and managed by Eris Property Group. This transaction marks the first of a pipeline of assets currently under consideration for development and inclusion. Units on Park was completed in November 2019 and it welcomed its first intake of students in January 2020. The company is considering various projects with the objective of aggregating a quality portfolio of prime assets across South Africa.
Eris’s dynamic approach to private student accommodation will endeavor to commit to projects that house a minimum of 70% of the beds at the National Student Financial Aid Scheme (NSFAS) rates or below, ensuring that students are receiving Wi-Fi, water and electricity as an all-inclusive rental.
The company’s development projects will offer a home for future generations of students and incorporate environmentally responsible principles using green technologies during its design and development process, as guided by the green building principles. Eris was part of setting the benchmark by being the development partner for South Africa’s first university residence that received a 4-star, Green Star rating from the Green Building Council of South Africa (GBCSA) for the University of Cape Town (UCT) residence.
Vuyani Bekwa, Eris Property Group’s Executive Head of Investments and Fund Management says their intention is to seek further capital in the next twelve months as they have a few exciting opportunities for the company.
“The minimum investment amount is R50 million, and the investment vehicle is hoping to attract the attention of fund managers and pension funds, or those investors with long-term investment horizons.”
The company is expected to contribute to the significant shortage of quality student accommodation in South Africa, with the added benefits of job creation and additional work in the construction sector, which we regard as essential in these times.
“The company is structured so that fees are only applicable to drawn capital, rather than all capital committed, ensuring that investors receive value for any fees charged by the manager,” says Bekwa. “The intention is to add to the number of beds available, and not to acquire existing projects, however that will be dependent on the ability to deploy the funds, which we have been working on for the past three years.”