Respublica banks on Australia for growth

Posted On Tuesday, 07 June 2016 18:25 Published by
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Redefine Properties' student housing arm, Respublica, says it is set to grow exponentially when its Australian product comes online in 2019.

 Craig_McMurray

Redefine Properties’ student housing arm, Respublica, says it is set to grow exponentially when its Australian product comes online in 2019. The group is also considering a JSE listing.

Redefine owns 51% of the student housing provider. The company plans to provide 20,000 beds to South Africans by 2020 as it looks to fill the educational housing gap left by the state.

By then it would also have a substantial offering in Australia, said CEO Craig McMurray.

CampusKey, another student housing provider, has said it is planning to list in the next few years, becoming the first student accommodation-only provider on the JSE.

But McMurray said the listing of a student accommodation group could work only if the group had sufficient scale.

“It’s a growing asset class within the property sector, but for a listing to work, investors would need appropriate scale.”

The state had been operating in the affordable tier of the student accommodation sector.

“The middle segment is tier two and is more expensive (has) more customers, and offers more features, and there is the upper segment, which is tier three. Respublica operates in the second tier,” he said.

Respublica has not set a target date for a listing.

McMurray said Respublica would launch its first Australian offering in 2019.

Evan Robins, listed property manager of Old Mutual Investment Group’s MacroSolutions boutique, said Redefine had the clout to help Respublica become a leader in student accommodation provision.

Chris Segar of Ivy Asset Management said a student accommodation listing would be of interest to the market.

“The studies conducted recently reveal an extreme shortage in supply of student accommodation. The leases of student accommodation are relatively short-term in nature, and normally run for a 10-month period, because of the end-ofyear holidays. The one benefit of a relatively short-term lease of one year is that landlords could achieve a healthy, above-inflation rental reversion,” he said.

source" Business Day

Last modified on Tuesday, 07 June 2016 18:49

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