Standard Bank’s Real Estate Finance division executes first social loan for Growthpoint Student Accommodation Holdings
Standard Bank, acting as the Sustainability Structuring Agent for Growthpoint Student Accommodation Holdings (GSAH), recently executed its first social loan under the category of access to education as an essential service, in line with the Loan Market Association’s Social Loan Principles April 2022.
The pioneering R550 million social loan will provide funding for the acquisition of purpose-built student accommodation (‘PBSA’) providing students with access to housing which is linked to the provision of education. Without access to this accommodation, attending tertiary education may not be possible for some students. This deal demonstrates the successful collaboration between Standard Bank and Growthpoint Investment Partners and lays the foundation for future opportunities as Growthpoint Investment Partners has stated their ambition to grow this fund to R12 billion over the next seven years.
Carl van Blerk, Lead for Residential at Standard Bank, explains the importance of the collaboration, “The social loan extended to Growthpoint Student Accommodation Holdings strongly aligns with Standard Bank’s Social Economic and Environmental (“SEE”) strategy, specifically the education segment. From a real estate perspective, the student accommodation segment has been identified as an attractive sub-sector, following the demonstrated strong demand and forecasted undersupply”.
The PBSA contributes to a reduction in the national supply gap of student housing accommodation that is expected to increase exponentially by 2030. “Due to fiscal constraints, universities do not have the means to solve the housing shortage on their own and will therefore rely on the private sector to assist in dealing with the growing demand for student accommodation and to ensure that the minimum norms and standards are met,” van Blerk adds.
The demand for quality, affordable student accommodation is expected to continue to grow in line with future planned increases in enrolment at public universities, following the increasing demand for tertiary education by a growing youth population. The existing accommodation being targeted has been shown to have an extremely high average occupancy rate, despite the negative impact of COVID-19, which implies that there is still a significant demand for this type of student housing at the universities being targeted.
The housing will also be occupied by a high proportion of National Student Financial Aid Scheme (NSFAS) students who come from lower income communities.
Anneke Lund, Executive: Sustainable Finance at Standard Bank Group says, “The housing is located near universities which improves student safety and provides a more conducive learning environment. Given the quality of student housing, coupled with added amenities such as access to Wi-Fi, laundry, canteens etc. the housing itself and improved student well-being and accessibility is expected to contribute to students' tertiary education retention rates.”
“Given South Africa’s unique socio-economic circumstances, its young population needs student housing to ensure a fair opportunity to complete their studies in a conducive learning and living environment. It is wonderful that Standard Bank supports the funding of this essential need. South Africa has a relatively young PBSA market and this social loan for Growthpoint Student Accommodation Holdings will underpin a sustainable funding model for the future growth of this sector,” says Dirkje Bouma, Group Treasurer of Growthpoint Properties.
Standard Bank Real Estate Finance is committed to funding with purpose and looks beyond traditional real-estate asset classes to achieve impact and alignment to the needs of clients in the markets we operate in.