Prasa on track to provide accommodation to 3,200 NSFAS students in Cape Town
More housing and retail developments on the way
The Passenger Rail Agency of South Africa (Prasa) has partnered with a property company to provide accommodation for more than 3,200 students in Cape Town.
Students eligible for National Student Financial Aid Scheme (NSFAS) funding will be able to move to the units near Cape Town Station in February 2024.
Prasa group CEO Hishaam Emeran said the project was worth R1.4bn.
“The Cape Town station development, agreed between Prasa and Eris Property Group, the first ever co-investment for Prasa, is a major achievement and milestone for Prasa Intersite in securing long-term financial stability for the business,” said Emeran.
“Prasa is pleased to announce the project is 88.8% complete, with the first intake of students expected from February 2024 and the retail precinct expected to be complete in November 2023. It is set to make a welcome contribution towards student accommodation in the City of Cape Town.
“The R1.4bn co-investment development of the iconic station involves the construction of student accommodation with 3,200 beds for NSFAS eligible students right at the heart of the City of Cape Town’s transport network. The project also boasts the redevelopment of the 7,000m² retail precinct to enhance foot traffic and boost commuter experience.”
Annette Lindeque, CEO of Intersite Prasa's asset investment company, said the “transaction went through many rigorous legal and audit governance processes prior to signature of all agreements to give effect to the transaction.
“This mixed-use property development of the Cape Town station is one of the examples in which we are repositioning our stations as places where people can live, work and play, while creating transit hubs to enhance the passenger and customer experience,” said Lindeque.
“We expect to conclude similar investment agreements soon to bring in private property developers while unlocking value for Prasa, thereby fulfilling our secondary mandate.”
Emeran said Prasa has established a separate social housing project near Goodwood train station. Prasa teamed up with other agencies to build 1,055 units, with the initial phase costing about R575m. Emeran said the Goodwood station social housing project is “ almost 70% complete for phase 1 and will see more than 1,000 residents of the City of Cape Town take advantage of this low-cost housing opportunity by the end of October 2023”.
He said: “This historic joint social housing development initiated by Prasa and signed by Prasa's investment vehicle, Intersite Investment, will see 1,055 social housing units built near the Goodwood station on Prasa-owned property/land. The project is developed by DCI Community Housing Services and co-funded by the Social Housing Regulatory Authority and the Infrastructure Fund, among others, and the City of Cape Town. Once complete, the development will be boosted by construction of a 5,000 m² retail facility on the station deck. The second phase is expected to be complete in 2024.
“This project demonstrates the importance of cross-sector collaboration and public sector partnerships in generating socioeconomic and commercial value. It also demonstrates the role Prasa can play in urban development by encouraging commercial and residential development near transit hubs.”
Emeran said Prasa's secondary mandate, executed by its property division Prasa Corporate Real Estate Solutions (CRES), and special purpose investment vehicle, Intersite Asset Investments (Intersite), includes real estate investment and development and urban telecommunication.
“Prasa CRES owns and manages rail stations, retail spaces at its stations, offices, residential spaces and land, making Prasa one of the largest intermodal transport landlords in South Africa”
Emeran said Prasa has intensified its property development strategies in line with best international practices of subsidising the cost of running passenger rail such as activities undertaken by international rail operating companies like Hong Kong, Deutsche Bahn, Network Rail and Japan Railways, which generate a sizeable portion of their net income from non-fare revenue activities.
“Secondary mandates include the leasing of property and co-investment on developments to ensure market-related returns are generated from these assets,” he said.
“Intersite is also co-investing with Urbane Living in a development in Braamfontein, Johannesburg. The Rynx will see the conversion of Prasa's existing Tippet building offices into 189 residential units and transforming 1,700m² for ancillary uses (rooftop storage) at an estimated cost of R67m over 18 months. Construction is anticipated to commence in October 2023.”
He said Prasa was finalising a further 20 developments for student and gap housing across its rail network.
“As we rebuild passenger rail services and bring people back to rail, unlocking value in our property portfolio is an important part of our strategy to secure long-term financial sustainability and support our primary mandate of providing a safe, reliable and affordable commuter rail service,” said Emeran.
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