138 Student Living Jamaica, 138SL, the provider of accommodation for students at the University of the West Indies, says that while rental rates were increased this academic year, it was done in accordance with the concession agreement.
The move has contributed to improved revenue flows for 138SL but has resulted in some students seeking cheaper off-campus lodgings as an alternative, the Financial Gleaner has learned.
However, there is no indication that the migration has affected take-up of rooms on the halls that 138SL manages.
The accommodation company offers rooms on a month-to-month basis, compared with university-managed halls where rates are set by the semester or for the year.
Under 138SL, the highest rate of increase was at Irvine Hall, which one company official explained was due to the fact that the university no longer subsidised the room rate at its oldest hall.
Irvine has been significantly upgraded by 138SL, and now, rates have been brought in line with the concession agreement, which has a set rate of return.
Cranston Ewan, CEO of 138 Student Living, said the rates were increased for the academic year starting September 2022.
“Our concession agreement provides for an annual rate review,” he said.
The student housing company developed and manages 1,464 rooms at four locations on the UWI Mona campus in Kingston, encompassing 1,692 beds, under a 65-year concession.
Unit rates at Irvine Hall are now $41,400 for single rooms for each month and $31,280 for double occupancy. At Leslie Robinson Hall, single rooms cost $65,944; and at George Alleyne Hall, single rooms are $65,944 while double occupancy is $38,354.16.
While 138 SL charges by the month, the UWI-managed halls quote rates by the semester or, alternatively, by the year.
A.Z. Preston Hall currently charges $94,000 for double occupancy to each student per semester and $119,000 for single occupancy.
At the Elsa Leo Rhynie Towers, room rates are set for the entire year. For the current period, students are charged $285,000 for single occupancy and $240,000 for double.
Rate changes are adjusted by the school on an annual basis.
Under 138SL, while the rate of increase at Irvine Hall was 15 per cent, the rental adjustments at the other halls were in the range of two per cent, Ewan said.
The higher rate appears to have not affected occupancy. The four halls managed by the company have an average occupancy of 94 per cent, Ewan said.
The university has 12 halls of residence, with eight administered by the UWI and the remainder by 138SL.
The university’s partnership with the company founded by John Lee dates back nearly a decade. Around that time, it also went public as a start-up operation and listed on the Jamaica Stock Exchange in December 2014.
The COVID-19 pandemic had a negative impact on occupancy levels and revenues, but the company is in rebound. Currently, its annual turnover is back to $1.2 billion, and its annual profit outturn has climbed and is now within the $300 million band.
Under the pandemic, occupancy fell below 30 per cent but increased slowly as UWI Mona gradually reinstituted face-to-face classes.
The company has been seeing improved results due to variation claims relating to Irvine Hall and UWI’s 90 per cent occupancy guarantee.
The variation claim is a recently revised financial model for the 2015 concession agreement with the University of the West Indies, which aims at ending disputes over shortfalls in occupancy.
In its most recent financial report for the quarter ended December 2022, the company projected continued improvement in occupancy, “as students seek for quality accommodation in a secured environment”.
Profit for the period totalled $81 million on revenues of $346 million.
The company noted that the 24 per cent increase in revenue for the quarter was driven by improved occupancy from short-term rentals as well as high long-term occupancy rates above 90 per cent and a general increase in room rates for long-term residents and the Irvine Hall variation claim.