138 Student Living wraps up another dorm project
138 Student Living Jamaica Limited, led by John Lee, will put another 400 rooms into service at the University of the West Indies near the end of summer.
Lee said Wednesday that while the occupancy level is now at 76 per cent for the rooms already in service, he is confident it will rise to full take-up when the new academic year begins.
The student housing developer is putting the finishing touches on 400 new rooms at Irvine Hall at a time when some 300 beds are already empty.
138 Student Living secured two concession agreement with UWI, the first of which calls for the company to finance, build and operate student flats for 30 years. The agreement calls for a 15 per cent real rate of return annually for 138 Student Living.
The second agreement was for the reconstruction of the Irvine and Gerald Lalor residential halls, totalling 750 rooms. That concession is for 35 years and is being done under subsidiary company 138 SL Restoration Limited.
UWI has guaranteed 90 per cent occupancy of the constructed units in any 51-week period for as long as the concession agreement is in place.
To gin up business, sources told the Financial Gleaner that students were invited by a message circulated via WhatsApp to take rooms on new halls and "pay the same rate they were paying off campus."
One student with whom Financial Gleaner spoke said she enjoyed the discount for an entire semester after moving on campus. She was now paying regular rates, she said.
Lee said he had no knowledge of the promotion.
"I can't speak for the university. I don't know what the university has done. I can't tell you a 100 per cent what they have done, but I do know that they were sending out a circular to say that they have vacancies on the hall," he said.
The developer said that from his perspective, occupancy levels were not a concern.
"The level of occupancy is very good," he asserted. "In fact, I am in the process of writing to the deputy principal. We only have 300 beds left out of 1,300 and its coming up now to the period where everyone is applying."
Still, in its most recent earnings report, the student housing company highlighted occupancy levels in four blocks as a drag on its results.
" ... As a result of being less than 100 per cent occupied in the additional four blocks, our net profit was less than optimum," said the company, citing an increase in operational expenses such as staffing and utilities in addition to financing costs.
UWI Principal Archibald McDonald did not respond to requests for comment.
The 1,300 currently available beds are excluding Irvine Hall which will come on stream in August with 400 new rooms.
Lee said he expects the new rooms to be filled, saying they offered "first class accommodation with a bathroom for every two rooms". Previously, on older halls, bathrooms were located at the end of each floor and shared by all students on that floor.
Asked if rates for the new Irvine Hall would be similar to new halls, he responded, "I have no idea."
Currently students who are temporarily staying in a new hall before moving back unto Irvine are paying rates of $171,720 for the year for double rooms and up to $202,000 for single occupancy.
Rates on the new halls published online for academic year 2016-17 were $35,000 monthly for double occupancy and $50,000 monthly for single units. There are 265 days in the academic year, or approximately nine months.
Lee declined to comment on whether UWI would be paying over a subsidy for the shortfall in occupancies.
"That's not a question for me, that's a question for UWI," he said. "I can tell you what the contractual obligations are.".
At half year to March 2017, Student Living Jamaica reported net profit a 200 per cent improvement in net profit to $27 million. In the financial report, Lee cited improved operations of the Gerald Lalor flats, and spoke of plans to target event to fill vacant rooms on a short-term basis.
The company has added a multipurpose facility that can accommodate up to 150 persons, for short-term rentals.