A shortage of student accommodation offered by WITS, UJ and other tertiary institutions close to the Johannesburg city centre have resulted in an almost unprecedented demand for student rentals in Braamfontein.
Byron Cornish, a Seeff Licensee in the Johannesburg CBD, says that 95% of the enquiries their branch receives are for student accommodation, but because of Braamfontein’s size and no new developments being erected here at the moment, demand far outstrips supply.
“The majority of students looking for accommodation are from WITS due to the close proximity, but there is also a large demand for the UNISA based universities, like Rosebank College, Damelin and Boston College to name a few. There are also many small Technicon’s and colleges in the area, making Braamfontein a true student hub”.
Cornish continues that even though the universities offer accommodation in student residences in and around campus (albeit limited), many students prefer sectional title living over this type of accommodation, especially from their second year onwards.
“Braamfontein offers residences and apartments and while Seeff mostly manages apartments belonging to individual owners, we have just taken a beautiful new female-only residence known as the Ntombi Res which has proven to be very popular and include all utilities and wi-fi for a monthly rental of R3595 per month for a 10 month lease.
The trend in Braamfontein at the moment is that first year students will tend to stay in communal residences in their first year because most come from other provinces and don’t know the area well. South Point is the biggest player in this field with over 4500 beds available in Braamfontein.
From second year onward students prefer to move into their own apartments, because not only have they made some great friendships and roommates to move in with, but they have become more familiar with the area, know which buildings are best and feel more secure in general. In sectional title units they can also enjoy more freedom and privacy.”
Cornish adds that the model in Braamfontein generally follows a trend of two students sharing a bachelor unit, two or three students sharing a one bedroom apartment and four students sharing a two bedroom apartment, because they are used to a sharing set-up from their days in res.
“While Braamfontein student accommodation is still below the curve when looking at prices of UCT, Stellenbosch and other universities, the returns are still great for investors. Generally bachelor units are priced from R6000 per month, one bedroom apartments from R7500 per month and two bedrooms from R8500.
These prices differ per building and unit and depend on factors like the apartment being furnished, availability of wi-fi etc. Not many students require parking in Braamfontein however because the furthest building from any university is only a 10 minute walk at most.
The high demand for tenants and high rentals create a huge opportunity for investors. We are still able to provide opportunities yielding over 10% returns in Braamfontein.
Recent pricing has started to push up as more and more people invest in the area and see the student model as a good one for their portfolios. This has pushed yields down slightly but has given previous investors good capital growth.
There are however always opportunities in Braamfontein and as the market is made up of 90% investment buyers so there is a lot of liquidity.”
Cornish concludes that Braamfontein has become very secure over the last few years and commercial development like shops and restaurants also place high value on security. Residential buildings are very secure with most having CCTV, access control and security guards.
“Students will generally always favour Braamfontein as it is within walking distance of the universities; it has also become a cultural student hub with an incredible vibe making it the 'cool' place to live.
Although Braamfontein will most likely always be a student area, it has also become a hotspot for outsiders wanting to experience a part of JHB CBD that is safe and fun.”
