When housing expenses, substandard living conditions, or inadequate public transit systems marginalize those who work, study, and establish their lives within a city, that urban center fails to operate effectively.
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Affordable housing sits at the heart of how South African 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, says Shaila Desai, the head of the Old Mutual Alternative Investments Residential Impact Fund.
Affordable housing is part of the urban infrastructure, enabling economic participation and supporting more inclusive growth.
She says affordable housing 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 quality of life.”
The head says 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.
She says housing, including student housing, close to urban centres, universities and economic nodes is a critical part of the ecosystem that makes inclusive growth possible.
According to the Impact Fund, this is especially relevant in SA, where the backlog and demand for quality accommodation remains deep, structural and institutionally underinvested.
It says the housing market is diverse and multi-faceted, and different sub-sectors and market segments carry different investment characteristics and degrees of suitability for institutional capital.
“Investment into 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 well-being 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,” Desai says.
But affordable rental stock often sits on the urban edge, far from employment, schools, amenities and transport, the head says. She says higher commuting costs, longer journeys and weaker access to opportunity offset lower rent.
“Well-located rental housing, by contrast, is often either priced beyond the reach of the broader consumer market or available only at poor quality. Student housing tells a different version of the same story: while major centres have drawn growing investor attention, many university towns still lack the purpose-built accommodation that supports safety, study, community and student success.”
This makes the investment case intuitive, Old Mutual Alternative Investments Residential Impact Fund says.
It says that 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, adds the impact Fund.
Rental and student housing also carry a different risk-return profile than traditional private equity or early-stage growth investing, Desai says.
She says 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, this 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, the head adds. She says it offers access to a real-economy asset class with visible impact, structured through defined mandates, clear risk limits and active asset management.
“The strategy for our Old Mutual Residential Impact Fund (OMRES) is built around this thesis, focused on rental and student housing with the affordable and middle-income market segments at its core.
"It targets a CPI plus 8% return (gross IRR), 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.”
According to Desai, the Old Mutual Alternative Investments Residential Impact Fund's recently completed Summerstrand Student Village development in Gqeberha makes the argument tangible.
She says 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 the Nelson Mandela University.
She adds that the Summerstrand Village is 100% in the affordable NSFAS market and was 100% occupied within one month after completion.
“It is the infrastructure thesis in practice: capital deployed into the creation of 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.”
“Our OMRES 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 additional pipeline of R3 billion in quality assets, it is positioned for growth and scalable impact,” Desai says.
“The interest from institutional investors to invest 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.”
Earlier this week, Retha Van Rooven said that as the country moved into the second half of 2026, she believes it has an opportunity to reshape the future of student accommodation in SA.
She says the first semester has brought significant change. “NSFAS's transition to direct accommodation payments, a stronger focus on accreditation, and ongoing discussions around accommodation rates have all challenged the sector to adapt and evolve.”
She added that while change is rarely without its difficulties, it has also created an opportunity for greater accountability, improved standards, and stronger collaboration between stakeholders.
For Van Rooven, the real conversation is not just about funding or compliance. She says it is about how the country collectively creates environments where students can thrive.
“Quality accommodation plays a critical role in student success. A safe, supportive living environment gives students the stability they need to focus on their studies, build meaningful connections, and prepare for the world of work.
“If we keep students at the heart of every decision, I am confident that the challenges we face today can become the foundations of a stronger sector tomorrow, Van Rooyen said.