Eris Property Group raises institutional funding for student accommodation
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ERIS PROPERTY Group has raised an additional R365 million investment into its social impact student accommodation company, SA Student Accommodation Impact Investments (Sasaii), as it plans to help alleviate the student accommodation shortage in the country.
The investment was from a consortium of domestic and international investors including Momentum Metropolitan Life, Eskom Pension & Provident Fund, International Finance Corporation and the Danish Sustainable Development Goals Investment Fund (DSDG). DSDG had committed R215m initially, and indicated a willingness to deploy more in time, Eris Student Accommodation executive head Johan van Vuuren said in a statement yesterday.
The Sasaii platform aimed to be converted into a real estate investment trust when it listed or when regulations allowed. “This liquidity event releases any capital these investors would have made into the platform,” said Eris Property Group executive head of investments and fund management Vuyani Bekwa.
Other investors had also expressed an interest in participating, and were at various levels of obtaining approvals. Eris aimed to raise up to R2 billion more for student accommodation, he said.
“Eris has been leveraging its property development and management skills to address student accommodation shortages. Our Eris Student Living property management service is tech-driven, and the entire leasing process happens digitally, from start to finish,” said Van Vuuren.
Momentum chief alternative investment officer Sonja Saunderson said their Units on Park investment in Hatfield, Pretoria, was part of Momentum’s responsible investing initiative, which provides quality, purpose-built student accommodation around South Africa.
Units on Park is a 988-bed student accommodation property developed and managed by Eris that was completed in November 2019.
Units on Park had performed well since its first intake in 2020, said Saunderson.
“During the height of lockdown, when inter-provincial travel was allowed, our Units on Park building had a 60 percent occupancy, even though universities were closed or operating remotely at the time. “Having accommodation designed for studying made a huge difference to students, as they knew they would be in a safe environment,” she said. Eris tries to facilitate projects that house a minimum of 70 percent of beds at or below National Student Financial Aid Scheme rates.
Several new projects were under way, including Units on Jorissen in Braamfontein, which is targeting Wits University students with 998 beds with the potential to increase this to 1 071, subject to city council approval, and Units on Station Square in the Cape Town CBD, which was geared for students at the Cape Peninsula University of Technology and surrounding academic institutions, with 3 085 beds.
“With four existing international and local investors, another two or three substantial local investors would complete the picture.
“Our minimum investment amount is R50m, but the lowest investment amount we have received so far is R150m from an investor,” said Bekwa.