A consortium made up of Bopa Moruo, a 100% black-owned and managed private equity management company, RMB and French development finance institution, Proparco, has made a foray into the lucrative student accommodation market.
The consortium, in partnership with the World Bank’s International Finance Corporation (IFC), has invested R516-million in Respublica.
Founded in 2011, Respublica has 10 residences in Pretoria, Joburg, Bloemfontein and Cape Town, with a capacity of nearly 10 000 beds.
IFC, Proparco, Bopa Moruo Private Equity and RMB said they will each provide Respublica with equity capital of R181-million with plans to add almost 5 000 new beds to campuses in South Africa by 2025 and almost 9 000 by 2028.
Nthime Khoele, the co-managing partner at Bopa Moruo Private Equity, said: “The mix of local institutional capital, BEE capital and foreign direct investment capital, is ideal for Respublica to help unlock a pipeline of development opportunities to provide quality affordable student housing to an under-served market and growing student population.
We have confidence in the management team’s ability to successfully deliver an affordable quality product to the market.”
Data from the World Bank show that demand far outstrips supply in the student accommodation market and will continue to be so in the foreseeable future.
According to the Washington-based lender, with enrolments in South Africa set to grow to almost 1.6 million by 2025, the demand gap is set to grow to around 781 000 beds by 2025.
Of this demand gap for student beds, about 59% will be for Technical Vocational Education and Training (TVET) colleges.
“Supporting human capital development, including through improved access to student accommodation, is vital to spurring sustainable and inclusive economic growth in South Africa,” said Adamou Labara, IFC’s country manager for South Africa.
“Our aim is to ensure that all students in South Africa – particularly underserved students from low-income households–have access to high-quality, safe, affordable housing from which to pursue their studies.
“A partnership with global institutions like IFC and Proparco is an exciting development that provides significant credibility to our business going forward, and further reinforces the positive social impact that Respublica contributes toward education and young people in South Africa.
Furthermore, our partnership with astute local private equity players like RMB Ventures and Bopa Moruo allows Respublica to advance its economic transformation and participation goals,” said Craig McMurray, the CEO of Respublica Group.
“We are very proud to support Respublica and the development of sustainable student accommodation in South Africa, which is key to inclusive and equal access to higher education in the country,” said Samuel Touboul, senior investment officer at Proparco.
“Respublica has an unchallenged role providing housing to South Africa’s young population and supporting their access to higher education and academic excellence.
We have full confidence in its talented management and employees to provide high-quality and affordable accommodation services to an ever-greater number of South African students.”
JSE-listed Growthpoint Properties launched an unlisted, purpose-built student accommodation real estate investment trust (Reit) in January – the first of its kind in South Africa. Growthpoint acquired Joburg Stay from Feenstra Group last year.
Joburg Stay has seven student properties in Gauteng.
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