July 20th, 2016
There’s been a big surge in building for Purpose-Built Student Accommodation (PBSA) recently. In the big cities and large urban centres it’s been especially popular as student numbers continue to increase and universities struggle to accommodate them. Recently the government allowed universities to remove their student caps meaning they can accept many more students over an academic year, a move which will place increased strain on the existing stock of student accommodation. In recent times university provided housing, often inadequate and expensive, has seen demand plummet in favour of boutique student living provided by private specialist companies. As tuition fees rise and the cost of studying increases, the experience of student life requires a bit more value for savvy students and as such, investors and developers have seized on the opportunity to provide students with superior living solutions.
A recent study taken out and covered by WalesOnline found that Cardiff may require up to 15,000 extra student units per year in order to meet demand. This is not entirely different to the requirements of many other urban centres and busy cities. Issues are often occurring in overcrowded urban areas and this has a domino effect on the available housing stock for first time buyers as many landlords prefer to rent out their properties as multiple occupation housing. The issue is being alleviated by the private sector but could there be an alternative solution?
In South Africa the shortage of student accommodation is one of the factors that contribute to dropouts and high failure rates. African Student Accommodation Group (STAG African) is on a mission to address the student accommodation crisis in universities. To tackle the issue, the group is exploring new innovative development techniques.
Innovative building technology (IBT) is a green alternative to bricks and mortar building with lighter steel structures that are pre-fabricated off-site. In the building process, no water is required and 87 percent of the steel used is recycled. This reduces construction costs by 13 percent and time by 40 percent.
In 2008 STAG Africa decided it could build affordable and sustainable residences. Their research found that the average spend per student per room for universities in Africa was around R280,000 ($19,500) which they thought was high at the time and saw an opportunity.
The University of Fort Hare has received 244 new bed facilities built by STAG African, totaling 880 facilities built for the institution this year. The company is also responsible for building a R5 million residence at the University of Stellenbosch using innovative building technology (IBT) material.
In 2014, STAG Holdings merged with the African Student Accommodation Group to form STAG African. Since then, the company has successfully delivered over R9bn worth of developments.
They believe that there is still time for an undeveloped Africa to use green construction methods to build a sustainable industrialised and developed continent which can be an example to the rest of the world.
As investors reaping the benefits of good tenancy rates, high yields and strong capital appreciation drive growth and building in the sector the question remains are enough units being built? That question won’t likely be answered before the new influx of first-year students in September but greener building solutions seems to be one option. Certainly existing projects mainly employ environmentally friendly practices but if the African example is anything to go by perhaps there is merit in investigating this avenue further.