Affordable housing sits at the heart of how cities function. A stable, well-located home shapes almost every part of a person's life: access to work and education, transport costs, safety, family stability and dignity. It is also part of the urban infrastructure that enables economic participation and supports more inclusive growth.
Infrastructure is more than the roads, rail, ports, power stations and fibre networks we typically associate with the term. It includes the physical and social facilities that give people a viable base from which to participate in the economy and pursue a quality of life.
A city cannot function well if the people who work, study and build their lives in it are pushed to the periphery by housing costs, weak public transport links or poor-quality accommodation. Housing, including student housing, close to urban centres, universities and economic nodes is a critical part of the ecosystem that makes inclusive growth possible.
This is especially relevant in South Africa, where the backlog of and demand for quality accommodation remains deep, structural and institutionally underinvested. The housing market is diverse and multifaceted and different subsectors and market segments carry different investment characteristics and degrees of suitability for institutional capital. Investment in quality rental and student housing, with a primary focus on the affordable market segment, is a viable mechanism for deploying institutional capital, on a commercial basis, into the wellbeing of society.
In our two decades of housing investment experience, this is the market segment with the most robust demand, the strongest risk-return profile for institutional investors and the best suitability for scalable impact. While policy conversations often focus narrowly on home ownership, the reality is that not every household qualifies, is ready or prefers it. Many opt for the lower cost and greater flexibility of renting and rental is often the first step on the journey to ownership.
But affordable rental stock often sits on the urban edge, far from employment, schools, amenities and transport. Lower rent is offset by higher commuting costs, longer journeys and weaker access to opportunity. Well-located rental housing, by contrast, is often either priced beyond the reach of the broader consumer market or available only in poor-quality accommodation. Student housing tells a different version of the same story: while major centres have drawn growing investor attention, many university towns lack the purpose-built accommodation that supports safety, study, community and student success.
This makes the investment case intuitive. A rental and student housing portfolio is built on tangible assets, with a revenue and cost base that can be understood, optimised and actively managed. Income is generated through occupancy and rent collection, while long-term value is supported by inflation-linked rental growth, efficient operations, disciplined asset management and active portfolio curation.
Rental and student housing also carry a different risk-return profile from traditional private equity or early-stage growth investing. They are not designed for highly variable outcomes tied to a single exit. Their appeal lies in predictable, cash-generative, inflation-linked assets that deliver a running cash yield and long-term total return, with lower volatility than more sentiment-driven listed property exposures. Paired with an embedded impact mandate, the profile suits institutional investors with long-dated liabilities and an interest in impactful strategies.
This is why affordable rental and student housing can be a strong institutional fit. It offers access to a real-economy asset class with visible impact, structured through defined mandates, clear risk limits and active asset management.
Our strategy targets a CPI plus 8% return (gross Gross Revenue Retention), including an annual cash yield, and its embedded impact mandate includes not only the provision of quality rental and student housing, but also facilitating home ownership through the controlled release of rental stock for sale to consumers at a defined cadence.
Our recently completed Summerstrand Student Village development in Gqeberha makes the argument tangible. The investment involved acquiring 484 existing beds and developing an additional 832 beds to create a scaled and economically viable 1 316-bed purpose-built asset on the doorstep of Nelson Mandela University. Summerstrand Village is 100% in the affordable National Student Financial Aid Scheme market and was 100% occupied within one month of completion. It is the infrastructure thesis in practice: capital deployed to create a real asset that supports student access to quality accommodation, generates a long-term inflation-linked yield and strengthens the provision of accommodation around a major education node.
The platform is seeded to scale, with seed assets of 6 300 rental units and 7 800 student beds. With 90% in the affordable market segment and an additional pipeline of R3 billion in quality assets, it is positioned for growth and scalable impact.
The interest from institutional investors in investing in the wellbeing of society on a commercial basis is crystal clear, and OMRENT is designed to meet that need in a disciplined, scalable and risk-appropriate manner.
Shaila Desai is the head of the Old Mutual Alternative Investments Residential Impact Fund