$10 Million Fund Allocated for South African Students’ Accommodation After 300,000 Bed-Shortfall Indicated

The International Finance Corporation (IFC) has invested over $10 million (R150 million) in Eris Property Group, which will be used to provide accommodation for up to 15,000 South African students by 2026.

Accommodation facilities for the students in South Africa have not been sufficient for some time now, as the Department of Higher Education and Training (DHET) reported a 300,000 shortfall of beds before the pandemic, Erudera.com informs.

There are 2.5 million students enrolled at South African universities, colleges, and vocational colleges. DHET has admitted that only 11 percent of the student bodies could be currently accommodated, while the majority of them continue relying on allowances from the National Student Financial Aid Scheme (NSFAS).

On the other hand, the National Finance Corporation (NFC) estimates that the current state exceeds 500,000 beds, and the figure will continue increasing by 40 percent in the next four years.

This shortfall has been attributed to the increased student enrollment and slow rollout of the Student Housing Infrastructure Programme (SHIP). DHET’s program intends to provide 200,000 beds at universities and 100,000 at TVET colleges until 2030.

Eris, established in 2008 as a spinoff of RMB Properties, has shifted into a Purpose-Built Student Accommodation (PBSA) after ventures implemented in South Africa, Ghana, and Mauritius resulted in success.

Eris’ first contribution to building student accommodation was Units on Park, a 988-bed student accommodation property in Hatfield, Tshwane, that welcomed its students in 2020.

Following the Units on Park launch, Eris announced that the South Africa Student Accommodation Impact Investments program had successfully raised over $35 million (R500 million) in funding. This figure was further complemented with $10 million, allocated for students’ accommodation facilities.

“SASAII is targeting a 14 percent internal rate of return after tax, so we believe our Investment proposition is very attractive over the long term and will list it on a stock exchange at the appropriate time,” Eris said.

The partnership with IFC also extends the Excellence in Design for Greater Efficiencies program (EDGE), which authorizes recourse-efficient and zero-carbon buildings.

Units on Park’s most inexpensive option, which includes electricity, water, and Wi-Fi, is the four-bed unit which costs $327.83 (R4,640) per month, or $70.66 (R1,000) per student. In contrast, the most expensive is the one-bedroom unit for $430.27 (R6,090) per month.

Starting from this year, South African students have been protesting to be allowed to register for the new academic year, despite the $9,850 (R50,000) debt in fees. The protests, which started out peacefully, aggravated on March 10, when the police shooting left one person deceased.