Ripfumelo Mabasa

Student accommodation, or the lack thereof, has been grabbing news headlines regularly in the past. The shortfall is estimated at up to 500 000 beds. Student protests at the University of Johannesburg, the University of the Witwatersrand, the University of Cape Town and the Cape Peninsula University of Technology – to name just a few – have taken place to highlight the student housing crisis.

Clearly, there is a strong need for more decent, affordable accommodation near South Africa’s Higher Education Institutions – from Universities to TVET Colleges. But property entrepreneurs keen to take advantage of this opportunity will need to strike a careful balance if they are to succeed.

“The financial considerations for a student accommodation project are very similar to those of any other affordable housing development,” says Siya Jele, Portfolio Manager at TUHF. “However, understanding all the ancillary costs involved in providing housing for students, that meets all the criteria outlined by universities and preferred by students, is crucial as these can be quite different.”

Utilities and Wi-Fi, for example, must be built into the rate per bed. Landlords can’t recover these costs from students individually, as they normally would with typical tenants. Depending on where the facility is located – the distance from the facility to campus – landlords may also be required to provide transport services to and from campus. “You can’t just charge a bus fair,” Jele explains. “The cost of the shuttle and running the service must be included in your rate per bed.”

Students are fickle with high expectations. “Students prefer to not have to share facilities like bathrooms or kitchens en masse, so the old dormitory-style approach doesn’t work in this space anymore,” Jele says. “Properties must be designed with private bathrooms and kitchenettes included in each unit. These units can be shared by a limited number of students. Wi-Fi, too, is a deal-breaker for students – if it’s unreliable or slow they will move, the word will spread, and you’ll find it difficult to fill your units next year.”

“A multi-residential block of flats, for example, can command a cost-to-income ratio of around 30-35%, while for student accommodation its closer to 50% if you’re running a decent facility,” Jele says. “So being mindful of these unique costs is very important for a successful business in student housing.” Student Housing provision is actually closer to Hospitality than normal residential accommodation.

Even so, the profit margins on student accommodation are good, as long as entrepreneurs provide the right product – one that meets the demands of students and universities. “It’s just a matter of balancing the increase you’re getting in terms of rental income against the commensurate increase in your operating costs,” Jele explains. “You have to put a lot more in to get a lot more out.”

Jele shares some key examples of how TUHF clients manage their operating costs effectively. “We’ve seen clients achieve good results by implementing Building Management Technology geared towards sustainable energy and water use to minimise utility costs. Placing motion-sensing light fittings in common areas to turn lights on and off – depending on whether students are using the space or not – can significantly decrease energy costs.

“One client has even linked the lights and plugs in each unit to students’ building access cards, so that they work much like a hotel key card. When students enter their rooms, they slot their card into a slot on the wall that activates the lights and plugs. When they leave, they take the card with them – turning everything off except the fridge.”

Other examples include using heat pumps instead of traditional geysers and low-flow water fittings.

“Well managed, well-appointed student accommodation facilities can give a higher return than standard affordable rental housing businesses, but the risks are also higher,” Jele says. One such risk lies in cash flow management, as student accommodation providers can only expect rent payments 10-months of the year and are often heavily dependent on NSFAS for payment.

NSFAS’s poor handling of private student accommodation payments has also been making headlines for well many a year. Late payments from NSFAS directly, or from universities who channel NSFAS payments to accommodation providers, can put property entrepreneurs in a very challenging position in terms of meeting their loan obligations.

“NSFAS is such a massive lever. It poses the biggest risk to successful student accommodation projects at the moment,” Jele says. “People can go for months without receiving payment, all the while having to maintain the standard of facilities they provide, with the result that a disproportionate volume of TUHF’s impaired loans are for student accommodation projects. Following on from this, as a responsible lender, it becomes increasingly more difficult to lend to new entrants due to the associated payment risk.”

That being sad, NSFAS could also drive the opportunities in student accommodation. “The focus from investors has been on developing student accommodation facilities close to traditional universities,” Jele explains, “But eventually this market will become saturated. At the same time there is very little focus on providing decent accommodation for students at TVET colleges. These institutions face the same dire shortages. If NSFAS resolved its funding mechanism challenges and drove funding towards supporting students in vocational training as well, there is huge potential in this largely untapped market.”

For TUHF, the challenge lies in balancing the opportunity to drive meaningful impact, against the substantial risks involved. First among these risks is NSFAS’ ability to execute on its mandate. The second is universities’ ability to administer student housing. Whilst some are very good at it, and others less so. Yet savvy property entrepreneurs can do well in providing this much-needed service.

This new development in the heart of Ferndale is an unusual addition to TUHF’s stable in many ways. The project’s outcome was not rental housing, but townhouses for resale. The finishes are decidedly high-end. Yet 300 on York is also a beautiful demonstration of how TUHF’s expansion to offer finance outside the inner-city supports its mission to create massive change in South Africa’s urban and suburban landscapes, one project at a time.

Urban densification with the family in mind

Designed with young professionals and young families in mind – people looking for homes that meet their changing needs while reducing their commute – 300 on York stands on the site of a large family house in the heart of the tree-lined suburb of Ferndale in Randburg.

The project’s developer, Manoj Mathew, explains: “The inspiration behind 300 on York came from a desire to use available urban space in a smarter way, to create homes that add real value to both the people who live in them and the communities around them. I saw a growing need for safe, secure, and affordable housing, especially for young professionals and new families who want to live closer to where they work and spend their time.”

This thinking aligns perfectly with TUHF’s decision to offer finance in suburban areas outside the inner cities. Smarter use of large, suburban erfs that are well located near schools, workplaces, transport corridors and diverse conveniences stimulates urban densification, economic activity and inclusivity – bringing people into the cities from the peripheries.

For Manoj, and for TUHF, Ferndale was a natural choice. The suburb is centrally located, with easy access to major business hubs like the Sandton and Randburg CBDs, as well as transport routes. “What really stood out to me was the area’s potential,” Manoj says. “There is clear movement toward growth and renewal, with many local businesses upgrading and modernising. That gave me confidence to invest here.”

The suburb consists largely of older, free-standing homes on sizeable plots of land, making 300 on York a prime opportunity aligned with TUHF’s expansion strategy. Siya Jele, Portfolio Manager at TUHF, says: “Principally, there were three things that gave us the confidence to invest in this project. We were impressed with Manoj as an investor and entrepreneur, with his vision for 300 on York and with the location he had selected for this project. The project was extremely well designed and well proportioned, with awesome finishes.”

Ferndale is also part of Johannesburg’s long-term development strategy. “Through 300 on York, we wanted to be part of that progress by offering homes that are not only well-designed and secure, but also help uplift the neighbourhood,” says Manoj. “We wanted these homes to be more than just a place to live. We wanted them to be comfortable, low-maintenance spaces that strike that balance between work and home, and to make everyday life easier and more enjoyable.”

The homes that now stand at 300 on York deliver this vision through smart design, quality materials, and a team that shared the same heart for the project. Walking through the show unit, it is clear that every choice – from the layout to the finishes – was made with care and a deep understanding of how people live. Thoughtful features like gas stove tops and dedicated office nooks align with the modern ways people live and work.

TUHF’s unique investment in its clients’ success – not only financially but through personal, hands-on support – remains the cornerstone of its approach. “TUHF believed in me and my vision from the start,” Manoj says. “They offered guidance, encouragement, and the kind of support that feels more like a partnership than a transaction. What stood out most was their flexibility and willingness to adapt as the project evolved.”

This holds true to TUHF’s commitment to ensuring clients can grow their property portfolios and sustainable businesses. Though 300 on York isn’t intended to become a rental housing business, it meets all the criteria for a TUHF project under its expansion strategy.

Manoj says: “Their support isn’t just about business; it’s about shared growth. They invest in you through training, advice, and trust, which builds lasting loyalty and the foundation for future success.”

Siya describes Manoj as an extremely knowledgeable person. “He is very meticulous in his understanding of property development processes, and his house was in order when he came to us for funding. These are some of the traits we look for in TUHF entrepreneurs.”

At the time of writing, 80% of the townhouses that make up 300 on York had been sold. There has been strong interest from buyers and great retention of tenants, indicating that the densification of this erf has led to a property development the community truly values.

“I’m most proud that we stayed true to our vision and delivered something meaningful, a quality development that people are proud to call home,” Manoj says. “The journey had its challenges, but with faith guiding my steps and a clear purpose, we made it happen. It’s a blessing to be able to create something that truly adds value to our community.”

To aspiring property entrepreneurs, Manoj offers this advice: “Ultimately, success in property development is about being proactive, disciplined, and committed to continuous improvement. With the right mindset and support, your project has every chance of being both profitable and high-quality.”

To find out more about how you can partner with us for growth, click here.

By Siya Jele, Portfolio Manager

Building a successful property portfolio, like launching any successful entrepreneurial business, is a bold and complex undertaking. It is not a shortcut to instant wealth, but with the right approach, sound planning, and patience, it can be rewarding and ultimately lead one to long-term success.

Two property development strategies tend to yield the most consistent success: new builds and refurbishments. New builds, while offering fresh potential, are intricate by nature. They involve land acquisition, managing construction timelines and costs, and navigating regulatory requirements. Refurbishment projects, on the other hand, are becoming increasingly common—not just in inner cities but also across broader metropolitan areas, where offices are being repurposed into residential housing.

Regardless of approach, the first critical key to success in the property sector is doing one’s due diligence. Whether it is new (Greenfield) developments, or refurbishment (Brownfield) projects, property entrepreneurs must have a thorough understanding of the market, client demographics, and property specifics.

Understanding your target market is absolutely crucial. Who are your tenants? Who lives in the immediate area? Are they retirees, young professionals, or families? These questions play a central role in shaping your investment strategy. The demographics and lifestyle needs of the surrounding community should directly influence the type of property you develop or refurbish—ensuring it meets real demand and stands a better chance of long-term success. There is no point in pouring money and time into building an ambitious property development that may be a passion project only to discover that is not what is needed in the area, or that there isn’t enough sustainable demand for it. 

Due diligence goes beyond demographics. It includes thorough property inspections, a clear understanding of legal responsibilities, identifying risks or liabilities, and assessing both current market demand and future growth potential.

Financing is another pillar of successful development. Property is capital-intensive, and securing the right financial backing is essential. Whether working with TUHF or a bank, entrepreneurs must understand the terms of the loan and ensure the financing structure supports their long-term goals. Acting swiftly to close transactions is also important, as delays can result in lost deals or expiring financial terms, all of which are costly and may derail an investment

Because TUHF focuses on long-term property investment with fifteen-year loan terms, we are seeking developers with a long-term vision rather than those chasing quick profits. Therefore, entrepreneurs working with us must have strong property management skills to ensure long-term profitability.

Beyond financing and due diligence, success also hinges on the skills of the entrepreneur. A balanced mix of hard and soft skills is vital. The hard skills include financial literacy – the ability to analyse financing structures and assess financial feasibility – along with the business savvy to evaluate property market trends, negotiate favourable contracts, and manage operational logistics efficiently.

For entrepreneurs looking to strengthen these capabilities, TUHF offers a dedicated training programme to help build the necessary expertise. The TUHF Programme for Property Entrepreneurship (TPPE) is a comprehensive property training programme, delivered in Partnership with the University of Cape Town, designed to empower property entrepreneurs to succeed. TPPE is open to TUHF’s clients, as well as non-clients interested in property and how to run a property business.

Equally important are soft skills. Three stand out: patience, meticulous attention to detail, and thirdly, adaptability.

Patience allows developers to wait for the right opportunities and make decisions strategically, rather than reactively. A major red flag is rushing into a deal without proper preparation.

Attention to detail is non-negotiable. Every aspect—financing structures, inspections, feasibility studies, and contractual terms—must be examined carefully. A meticulous approach prevents unwelcome surprises and ensures that all aspects of the deal are solid and well thought through.

Adaptability is the final key. Entrepreneurs who ask questions, seek clarity, and strive to expand their understanding are well-positioned to navigate the complexities of the industry. Continuous learning and adaptability in the face of market shifts are key drivers of resilience and ultimately success.

It’s also essential to recognise and prepare for common pitfalls. Acting too quickly, failing to ask the right questions, or ignoring red flags—like a seller unwilling to disclose reasons for the sale—can lead to trouble. Poor financial management is a major cause of failed projects, even when all other elements seem sound. Overcapitalising or mismanaging cash flow can quickly derail an otherwise promising development.

Ultimately, success in property investment comes from a blend of knowledge, discipline, adaptability, and the willingness to learn and plan. With due diligence, the right financing partners, and the development of critical skills, entrepreneurs can confidently build a sustainable and thriving property portfolio.

To find out more about how we can assist you in your property investment venture, click here.

By Lusanda Netshitenzhe, CEO, TUHF21

Affordable housing remains an important need and continues to be one of the most pertinent topics of our time. As urbanisation continues and population growth expands, the need to sustainably provide affordable housing opportunities to more people has become urgent.

Lusanda Netshitenzhe, CEO of TUHF21 believes that “while making a profit through investing in affordable housing, is essential; it needs to be complemented with deliberate actions to create a positive impact on communities and society. This is especially so in recent times, because funders are beginning to consider how effectively companies align with Environmental Social and Governance (ESG) goals before funding a project.”

Additionally, in South Africa, over the past year water scarcity has become a contentious and critical topic to address. This, along with the recent return of load shedding shining a light again on the need for sustainable power supply, is making environmental concerns a priority. Housing and development projects, for example, are increasingly incorporating greening solutions – including solar power, more efficient water heating alternatives and more efficient ways to use both electricity and water.

“We are no stranger to impact investing and the role it must play in inculcating positive, lasting social change. We have been committed to fostering urban regeneration and densification through affordable rental housing for more than 21-years and continue to remain so. What we are seeing now is the importance of impact investing being brought even more to the fore,” says Netshitenzhe.

Affordable and decent housing is crucial to fostering the dignity of all citizens, as well as enabling people to build their prosperity. It is also an integral part of addressing spatial exclusion and historical inequalities.

For these reasons, the government has committed to provide more housing in the country’s city centres, and the new Expropriation Act, if applied appropriately, lays the groundwork to take a firm aim at addressing the problems of abandoned and hijacked buildings and to use such buildings to create new affordable housing opportunities.

“However, neither government nor legislation can address the challenge of creating affordable housing on its own,” says Netshitenzhe. “Fostering urban and economic development requires partnerships between government, private companies and entrepreneurs who are empowered to succeed, so that together we can generate sustainable, inclusive growth in our cities and the country. For that to be a reality, we must attend to urban regeneration, urban densification, and urban management.”

In context, for the past 30 years, government has responded to the challenge of providing affordable housing in many commendable ways and their programmes have accommodated many people in decent homes.

While this approach had value, it also meant that many such housing developments were built on the periphery of cities, where building costs could be kept low, and land was less expensive. Unfortunately, this also resulted in urban sprawl, fragmented city structures, and people having to travel long distances into the city where many worked.

The recent pandemic and the lockdowns it demanded magnified the social inequalities that have long been of concern. Lack of access to well-located affordable housing and lack of access to funding for entrepreneurs has reached a point where critical intervention is needed. 

“We have aimed to address these challenges with uMaStandi, which focuses on reinvigorating townships and helping bring decent and affordable housing into traditionally underserved areas,” says Netshitenzhe. “Our approach is to curate products that solve urban development challenges and there is still more to be done. The next product we are considering bringing to market is a rent-to-own model. The idea would be to offer property entrepreneurs a funding vehicle that allows them to provide housing on a rent-to-own basis rather than a rental-only basis.”

Once adopted, the product will mean tenants can ultimately buy their units – making it easier for first-time homeowners to enter the market, creating a sense of ownership of the unit, the building and the surrounding precinct.

“We believe that this will inculcate more active involvement from tenants in our areas of finance, leading to better urban management and preserving the quality of building stock. We further believe that tenants who own part of the buildings in which they live are more likely to feel invested in building upkeep and maintenance of the surrounding precinct,” says Netshitenzhe.

“Our aim is to create real development impact and value in areas where we invest and this, we do to improve people’s lives – enabling them to live in dignity, earn a sustainable livelihood, succeed and contribute to healthy communities. This is the kind of positive and sustainable socioeconomic change that we are committed to,” concludes Netshitenzhe.

By Nqobi Malinga, uMaStandi Portfolio Manager

Developing profitable properties is a journey, and like all journeys, it begins with a first important step. For many entrepreneurs looking at building their first, or their next, development in the township that first step frequently entails financing the project. The good news is that we have been catering to this with uMaStandi for ten years and so we are seasoned in helping entrepreneurs take their idea from a plan to a profitable reality.

All profitable businesses start with an investment – of time, money and commitment – and property development is no different. For entrepreneurs embarking on this path and who may be interested in the support offered by uMaStandi, there are some key foundational things to know.

While uMaStandi can finance up to 80% of the investment needed, entrepreneurs are required to fund a portion of their project with their own equity. Additionally, uMaStandi currently provide loan facilities up to R15 million at the top end. Also, it is important to know that we provide financing for long-term rental developments, rather than Airbnb’s or guesthouses.

In helping customers develop profitable properties and build their wealth, our aim is also to promote good and affordable long-term accommodation, as we remain committed to helping revitalise and rejuvenate townships areas so that they can grow healthy communities.

Another step towards developing profitable properties is ensuring that your property is a good investment. Ideally, the overall value of the asset you develop should exceed the money you need to spend to purchase or develop it and it should appreciate with time.

Additionally, being fully compliant with municipal regulations is essential. This means having approved building plans and an occupancy certificate, whether you finance your development via uMaStandi or not. If you don’t have approved building plans, it is going to be exceedingly difficult to secure refinancing for the property should you need it. Circumventing the city and failing to obtain approval of your building plans would impede your ability to sell the property if you wished to down the line. That means you will be stuck with dead equity, which is undesirable.

To develop profitable property in the townships, you must understand what people want, know how much they are willing to pay, and then build for the market for which you are catering.

For example, while shared living spaces – like a shared bathroom and kitchen – may have been a popular design in years past, it isn’t anymore. The trend now is towards self-contained bachelor units, which are increasingly in demand. Developers should therefore build a unit that can accommodate some room for entertainment, such as a couch and a TV, along with a bed and its own toilet, shower and small kitchenette.

Having on-site parking on the property is not just attractive – it can be a dealbreaker if unavailable. Beyond that, having Wi-Fi and Internet connectivity has become a standard amenity. If you can afford to implement some renewable energy options, such as solar, on the property that is an advantage. One market that can be quite lucrative, even though it is a niche, is student accommodation. As a landlord in this market, you need to treat your investment as a hotel, in which your tenants have most things covered or catered for by you as the landlord, so this will increase your operational costs significantly.

It is important to factor in a reserve fund or budgeted savings to ensure you are able to still keep up with the bond instalments and other financial obligations the property has, due to the shorter cashflow period of 8-10 months, rather than the usual 12-month collection period.

There are two key factors that we see making the difference between failed ventures and building a profitable, successful one. The first is to work with a trusted team, who can support you, advise you and assist you on your journey. This is particularly important for first time property entrepreneurs, who often make common mistakes that could otherwise be avoided.

Finally, the biggest catalyst to ensuring that your venture is profitable and successful, is investing in yourself and continuously strengthening your knowledge of property development. To that end, TUHF and uMaStandi offer a short course with the University of Cape Town called the TUHF Programme for Property Entrepreneurship (TPPE). While it is free to our clients, it is also available to anyone interested, for a fee. The programme also gives you access to a seasoned mentor for six-months who has several decades of experience in property development and can help you avoid the pitfalls and propel yourself to a more successful outcome.