WORDS: DEBBIE HATHWAY :: PHOTOS: SUPPLIED
As student registrations outstrip accommodation supply at tertiary institutions, suitable property on auction offers investors the ideal opportunity to create their home away from home.
Since the beginning of 2023, students looking for a home away from home during their tertiary study phase have faced more bad news than good. There are not enough beds to meet the immediate demand, which has opened the way for property investors to find a solution – often by buying suitable property at auction.
“There is a significant demand for affordable, safe student housing, close to tertiary institutions, transport, and entertainment,” says Ari Ben, CEO at AuctionInc. “Savvy investors looking for a market-related, recession-proof return on capital will do well to consider one of these properties on auction.”
Since 1994, SA has witnessed a remarkable surge in tertiary student enrolment, with numbers more than doubling. However, this rapid growth has significantly outpaced the availability of affordable and high-quality student accommodation.
In a January 2023 statement, the Minister of Higher Education, Science and Innovation, Dr Blade Nzimande, pegged the current shortage at over 400 000 beds for student accommodation at public tertiary institutions. He said this “exposes students to immense vulnerabilities, such as serious crimes and gender-based violence (GBV). Some students stay in facilities that are unconducive to performance in their academic work.”
HOW STUDENTS WANT TO LIVE WHILE STUDYING
Meanwhile, in 2020, the International Finance Corporation’s Student Housing Landscape in South Africa estimated a shortage of about 500,000 beds for the 1.19 million post-school education students enrolled at university and vocational training schools nationwide. That number is projected to reach almost 800,000 by 2025 with enrolments set to grow to nearly 1.6 million. The report states that the highest demand for purpose-built student accommodation lies within the affordable segment, especially for students funded through the government’s National Student Financial Aid Scheme (NSFAS).
Making affordable student accommodation available, particularly to the traditionally under-served, low-income communities, is critical to inclusive and equal access to higher education in SA, plus it has a measurable positive impact. Property investors who make high-quality, safe, affordable housing available to students also provide a more conducive learning environment. What’s more, student housing gives students a sense of security, provides them with a sense of belonging, and makes studying less stressful. Likewise, it gives parents peace of mind that their children are safe, especially in facilities with biometric access, surrounded by like-minded peers, and with easy access to facilities such as on-site gyms, coffee shops, fast internet and public transport. Ben said, “We have seen some robust bidding on the floor for well-run student accommodation facilities. AuctionInc recently sold NSFAS-accredited accommodation to the value of R20 million on auction.”
ADVANTAGES OF PROPERTY AUCTIONS
Extensive marketing: Property on auction is marketed extensively and often gets better reach than a traditional estate agent can. AuctionInc promotes auctions via multiple channels, including its database of over 50 000 qualified purchasers and digital platforms such as property-focused websites and boards outside the property.
Pricing benefits: Assuming competition for the asset, the bidders compete against each other for the property, positively affecting the price.
Transparent process: When you buy property through an estate agent, you don’t know who you’re up against, whereas at a physical auction, you can see who is in the room and who you are bidding against.
Quick result: The auction process is exceptionally rapid. AuctionInc sells properties, on average, in three to four weeks.
Sense of urgency creates hype: The event generates much hype, which creates urgency. The general psychology of a buyer is that they don’t want to miss out.
Prime site in central Rustenburg
HOT PROPERTIES ON AUCTION
Two properties developed as student accommodation go under the hammer at the AuctionInc auction at 11am on 24 August 2023. The first is NSFAS-accredited on a prime site in central Rustenburg. It offers 148 rooms for 189 students with retail outlets at ground level. The recently renovated property on Nelson Mandela Drive is well-managed and maintained near multiple university and college campuses. The student accommodation is configured with single, double and triple bed layouts, private and communal bathrooms, kitchens, a gym, a study area, a braai area, communal TV areas and laundry rooms.
The other is fully let student accommodation 1km from the Durban University of Technology (DUT) in the Durban CBD. This one operates as a student accommodation residence servicing the DUT campus and generates an annual income of R4,64m. The well-maintained seven-floor property boasts numerous features, including biometric access control, CCTV cameras, communal study, kitchen and entertainment areas and laundry facilities on each floor. Each of the 45 rooms is equipped with a fridge, private ablution facilities and a shower. The property is currently let directly to DUT for another two years and has a ground-floor retail component.
The next AuctionInc auction is on location at
Masingita House, 41 West Street, Houghton,
on Thursday, 24 August 2023, at 11am.
Bid on-site or via telephone. Visit auctioninc.co.za for more information.
