Student Living wants to put room construction on hold - Partners with Sagicor on work-from-dorm job programme
138 Student Living Jamaica Limited has formally asked the administration of the University of the West Indies to postpone the development of additional student housing until room demand exceeds current capacity by at least 20 per cent.
If the administrators of the Mona campus agree, it would push back construction of 826 residential units.
Chairman John Lee, who disclosed plans to delay the programme at the company's annual general meeting on Tuesday, also announced that 138 Student Living is partnering with large shareholder Sagicor Group Jamaica on a shared-services employment model for students - a project designed to put income into their hands to better afford the replacement housing provided by 138 Student Living.
Hall fees rise as high as $51,350 single occupancy per month and $29,770 for double occupancy, as outlined on UWI's website.
Lee noted that elevators which provide room access are keyed with entry cards that can be blocked if fees are not paid. He also said the UWI periodically requests acceptance of students at subsidised rates which are then set off against Student Living's land lease costs.
Rather than reducing services to students living on the halls, he said, the company is now looking to the insurance and banking sectors, among other firms, to hire them for back-office jobs.
The companies, Lee told the Financial Gleaner, would send excess work offsite to be processed by "the top five per cent of Jamaican students". He said Student Living would earn nothing from the arrangement and that Sagicor would upgrade Internet speeds for students to facilitate the work project.
As to the requested delay in new rooms, Lee said the company has proposed to UWI Mona that it delays the remaining 250 rooms that were to be built at Irvine Hall and another 576 new rooms that fall under its three-decade concession agreement with the university.
Student Living has constructed some 1,800 rooms at the university since its start up in 2014, under two concession agreements with UWI Mona. Lee noted that profitability for his company was challenging as some of the rooms were unfilled.
The 90 per cent occupancy guaranteed by UWI has been offset on the land lease arrangements, which calls for pro-rated payment of $100 million annually.
To date, the payments are up to $42 million annually, with adjustment for inflation; hence the need for the additional 10 per cent occupancy to improve net earnings, he said.
For the year ended September 2017, the company's revenue doubled to $573 million.
Lee said for the month of January 2018, the company will earn revenue of $11 million, but is aiming for more in the periods ahead.
"The goal is to keep that above $14 million going forward," he said.
In 2017, Student Living made pretax profit of $20 million, reversing a pretax loss of $24 the previous year. Lee said the company would start paying dividends to holders of preference shares this year.