In the 12 years since the announcement of plans for the new University of Johannesburg (UJ), incorporating RAU and both campuses of the Wits Technikon, the suburbs around these campuses and those of the University of the Witwatersrand (Wits) have steadily metamorphosed into “student central”, with literally thousands of rooms and apartments of various sizes available to let.
Johannesburg offers many opportunities for those investing in student accommodation. Early investors in student developments in Auckland Park, for example, have done well over the past few years. In 2004, bachelor and one bedroom units in the Laborie Village complex were selling for R195 000 to R250 000, while the one and two bedroom units in The Yard, a more upmarket complex to the east of UJ, were selling well at prices from R360 000, says Jacobs.This is according to David Jacobs, the Rawson Property Group’s Regional Manager for the Northern Region and KZN, who says many of these areas, and especially Braamfontein, Doornfontein and Richmond, have also really benefited from the explosion of demand for student accommodation in terms of urban regeneration and employment creation.
“Old apartment and office buildings have been given a new lease of life as trendy and generally well-managed student blocks, complete with their own canteens, games rooms, rooftop entertainment venues, gyms, study halls, laundries, shuttle services and free Wi-Fi.”
New shops, restaurants, markets and service businesses have sprung up to meet the needs of the burgeoning resident population, he says.
“The streets are cleaner and better lit, there are good public transport options, and areas that were once among the dingiest in Johannesburg are now vibrant and bustling.”
Meanwhile, he says other areas such as Auckland Park and Westdene have gone through a different kind of adjustment as a result of their new-found popularity with students.
Many of the large old homes in these suburbs were quickly turned into illegal student communes when UJ was established, but most of these have, however, now been overcome.
The City of Joburg has a new set of regulations regarding communes which it enforces quite rigorously, and there are now many more flats available in these areas thanks to steady development over the past few years, says Jacobs.
In addition, he says the City is now proposing to build more accommodation specifically for students along Perth Road, which is the spine of one of its “Corridors of Freedom”, and is already served by the new Rea Vaya rapid transit system, as well as other public transport.
“And as a result, these areas are back to being family-friendly and once again enjoying high demand among academics working at UJ and Wits, as well as medical personnel working at the nearby Helen Joseph and Milpark hospitals, senior SABC and Mediapark staff, and business executives with offices close by in Richmond or Parktown.”
What is more, he says much of the older housing stock in these areas has been upgraded by the conversion of former staff quarters and other outbuildings to bachelor and one bedroom cottages that can easily be let to students or executive singles for around R5 000 a month, and these improvements have also helped to increase home values in these areas.
Early investors in student developments in Auckland Park have also done well over the past few years. In 2004, bachelor and one bedroom units in the Laborie Village complex were selling for R195 000 to R250 000, while the one and two bedroom units in The Yard, a more upmarket complex to the east of UJ, were selling well at prices from R360 000.
By 2009, entry-level bachelor apartments in the area were being marketed for around R350 000, while the bigger units at The Yard were changing hands for around R1 million.
And these days, studio and one bedroom flats in Auckland Park start at around R420 000, or R495 000 at The Yard, and two bedroom apartments at around R700 000.
Meanwhile, rentals in the area now range from around R2 000 for a single room in a commune all the way up to R11 000 a month for a three bedroom apartment.
However, he says most private investment in student accommodation in Johannesburg is now taking place in Braamfontein and Doornfontein, where several major players such as Aengus, iThemba, Southpoint and Respublica have proved that there are excellent returns to be made if one can acquire student apartments at the right price and ensure they are well-managed.
Currently, purchase prices for studio and one bedroom apartments in Braamfontein close to Wits range from around R320 000 all the way up to about R600 000, and rentals start at around R4 000 a month for bachelor units.
In Doornfontein, apartments close to the UJ campus are now very hard to find, but when they are available, prices start at around R280 000 for older one bedroom units, and rentals at around R2 500 a month for studio apartments in renovated buildings.
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