CBD student accommodation popular

2009/03/13

With record numbers of students entering universities this year, demand for student accommodation in central Johannesburg is starting to outstrip supply.

Inner city developer Aengus Lifestyle Properties (ALP) has seen the number of students renting its refurbished apartments in central Johannesburg grow from 142 last year to over 1,200 with this year's student intake."There are about a ten times oversubscription for available student rooms," says ALP CEO, Richard Rubin. "University residences are battling to cope with the increased demand."Last year about 22,000 more learners than in previous years passed Matric with university entrance, putting pressure on Wits University and the University of Johannesburg to accommodate more students than usual this year.

According to some estimates there are more than 7,000 students needing accommodation and just 700 available rooms on or near Johannesburg university campuses. Rubin says demand has also been driven by a massive influx of foreign and out-of-province students over the past few years as the city's universities are regarded as among the country's premier academic institutions.

Aengus Lifestyle Properties began upgrading a number of buildings in Braamfontein into upmarket student accommodation last year. "So far this year, we are oversubscribed in terms of tenant demand for these buildings," says Rubin.

Now the company is looking at developing the YMCA building on Rissik and Smit Streets into a mixed-use development incorporating student accommodation."Students are tired of staying in dormitory-style accommodation where they may have to share bathrooms and other amenities," says Rubin.

Rubin says the company has not yet offered the student units for sale to investors because of the current economic conditions in the property market. "But as interest rates continue to decline, but so investor sentiment is likely to shift back towards purchasing and we may look to actively marketing sectional title units for sale later in the year," he says.

Net rental returns on units in the suite of inner city properties managed by the group continue to hold at between 10% and 14%."We expect student accommodation to make up an increasing proportion of our property portfolio," says Rubin.