Growthpoint embarks on an R800m student housing development

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Point Properties, one of South Africa's largest real estate investment trusts, has announced its largest student accommodation project to date under its Thrive Student Living brand. Now, the 800 million-ran development located next to the University of Quasunnetal's Howard College campus near Indurban aims to address the growing demand for student housing in the region.

Now, Amoghalang Mukumif and manager at GrowthPoint Student Accommodation Holdings joins us on the line to tell us more about the multi-millionaire project. Amoghalang, a very good evening and welcome to Power Business. Good evening, everyone. Thanks for having us.

Let's talk about the drive behind the decision. What drove a growth points decision to allocate $800 million to the student accommodation project in Durban? I suppose student accommodation is definitely a need there. No, absolutely. So, growth points entered the student accommodation sector in 2021.

We acquired a portfolio of 5,000 beds that were located in Victoria and Johannesburg. Subsequent to that, we've added another 5,200 beds to the portfolio. And those beds are also in Johannesburg, Victoria and Cape Town. So as the portfolio continues to grow, we saw Durban as a good university town that is in desperate need of investment. So you take that in, for example, at 43,000 students.

of which 14,000 are at UK Verde and Howard campus, where we plan to develop this property. Like most universities, UK Verde has not had a lot of investment in student accommodation from private players, and we therefore saw the need and the opportunity to bring supply to market and assess or accommodate the young people that are taking university in their town.

But as you mentioned, you know, that you identified Durban as this Howard College, you know, seeing that need there. But how does growth point address potential risks then associated with such a significant investment, you know, particularly in the student housing sector? Yeah, so we do a lot of silty market research. We look at the supply side. So what are the number of sites that are available for students in a particular geography?

both states that are offered by university and by private participants. We spend a lot of time celebrating our functions before we make a decision whether to go to a particular town or not. So that's the market size. And for this project specifically, the WTE, the largest student accommodation project that we've launched at Thrive Student Living. So delivery risk is a big part. So the one thing with student accommodation is that

You have to complete the project in time for the start of the academic year. So if you missed the January, February intake, you may have a vote in the extent 80. So to mitigate that risk, we've passed with growth for properties. They've got a training and development division, and they will assess that in the delivery of the project. They have to date, develop four properties for us, three of which have won multiple awards.

So we're confident in the ability to execute the project of the magnitude. And then, you know, Amoghalang, how does this property compare then to existing student housing options in Durban, in terms of location, pricing, and amenities? Yeah, location, we have the choices. We won't be the closest private student accommodation provider to the university of what's in the South. We are a hundred inches away from the game-wide increase.

on Maxi's Aquinas Street. The majority of students that live in private accommodation that attend to UK data and how a campus live far away from university and they get passed in by the university or by the private student accommodation providers. From a quality perspective, as I said, we've got three properties that have already evolved. So we're confident that our product is of a good standard. I would argue that it's a glow glass, but we bring the link at affordable rates. So we always make sure that

Our offering is in line with the NASA student accommodation allowance, which is about 5,000 in 2024. So we escalate our rentals at a new conservative escalation to see what we can get the building at when it opens in 2077. So we bring value to market, which we move in affordability, because affordability ultimately results in more access to accommodation by students.

So we consider that we've got a quality product that is priced well for that particular market and that we can demand for our product. And then I want to know from you, now that we've spoken about what we can expect from this project and we've put down the price 800 million rand, what then is the estimated economic impact of this project during construction and post-completion in terms of job creation and regional development.

Yeah, so it's a project that will be the green fuel development, so there'll be jobs created during construction. We estimate that we'll create about 1,200 temporary jobs during construction, and about 40 permanent jobs post construction. Obviously, once our properties are closed, we render services from clean companies, security companies, landscaping companies, et cetera. But during construction, we're very

We're very diverse in procuring groups and services where possible from local enterprises and also selecting companies. So the value chain in our effort job is quite expensive. We do procure both in coverage. We procure matrices. We procure data, data, study data, et cetera, because our properties are fully furnished and the students have to come with the minimum criterion properly.

So we try as much as possible to procure locally, because we believe that as we build this business, we need to ensure that there's economic empowerment in South Africa and in the region. But lastly, I think the longer term economic benefit of our effort last is that giving students quality accommodation without any higher chances of success. And the higher chances of success at universities, the better

chances of being grown if you have. So we believe that over the long term, the economic benefits far outweigh the short-term benefits, although we are very deliberate in contributing positively in the short-term level. You know, definitely an important one, jobs there, as well as economic growth within the region. But thank you so much, Amor Helang, just for outlining what we can expect there from growth point in terms of that 800 million and 800 million round student housing development.

Thank you very much. All right, that was Amokhelang Mukomie, Fund Manager of Growth Point Student Accommodation Holdings, talking to us about growth point embarking on an 800 million-round student housing development near the UK's in Howard College campus in Durban, aiming to address really the growing demand for student housing in that region.

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