Growthpoint, the nation’s largest property company, has unveiled plans to invest 1.2 billion rand (approximately $63 million) into the student housing sector by 2026. This move aims to counterbalance challenges faced in other real estate segments.
A substantial shortage of up to 500,000 beds within South Africa’s formal student housing sector, highlighted in a 2021 International Finance Corporation report, has triggered the interest of prominent real estate firms.
George Muchanya, head of Growthpoint’s Investment Partners unit, highlighted the pressing issue: “It’s a lack of institutional-type of accommodation.” Muchanya explained that Growthpoint seeks to bridge this gap by expanding their student housing presence.
Having initiated a dedicated student housing fund last year, Growthpoint plans to raise bed capacity by over 20%, reaching 8,800 by end of 2024, with further expansion in the subsequent year.
This strategic investment is projected to elevate Growthpoint’s portfolio value to 4 billion rand by 2024, up from 3 billion rand in June. Presently, the company owns 10 student accommodations in vital urban centers, including Johannesburg, Pretoria, and Cape Town.
This decision aligns with a critical period in South Africa’s real estate sector. As remote work reduces office space demand, listed South African real estate, particularly real estate investment trusts (REITs), faces pressure to maintain dividends. Frequent power blackouts necessitate substantial generator investments.
Since the pandemic, investments in South Africa’s benchmark index doubled, while the listed property sector lagged, yielding only 143 rand for every 100 rand invested.
Growthpoint’s foray into student housing not only addresses existing challenges but also positions the company to tap into a high-potential sector. As Growthpoint navigates evolving real estate dynamics, this calculated investment could herald a transformative shift in market trends.
17th August, 2023
Delino Gayweh
Serrari Financial Analyst
photo source Google
Article and News Disclaimer
The information provided on www.serrarigroup.com is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
www.serrarigroup.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an "as-is" basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
In no event will www.serrarigroup.com be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.
The articles, news, and information presented on www.serrarigroup.com reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.
The content on www.serrarigroup.com may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, www.serrarigroup.com takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.
By using www.serrarigroup.com, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website.
www.serrarigroup.com, reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.
Serrari Group 2023
