Identifying a sustainable risk management strategy for private student accommodation providers in Bloemfontein
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Date
2023
Authors
Musundire, Simbarashe
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Free State
Abstract
The research investigated the risks prevalent in the private student accommodation industry in Bloemfontein with the aim of establishing sustainable risk management strategies to improve viability as well as impact knowledge to enable private student accommodation providers to incorporate risk management into their business strategy. The study showed that the majority of private property investors did not conduct due diligence before in investing in private student accommodation while overlooking potential risks associated with the growing industry. As a result, students have been subjected to dilapidated living conditions. Properties in Brandwag, Willows and Universitas have been left in dilapidated states as property investors fail to cope with both systematic and unsystematic risks prevailing in the industry. Various risks faced by private student accommodation including cashflow challenges, financial management, liquidity and default risk, were identified as major risks in the private student accommodation sector in Bloemfontein. Focus and emphasis was on identifying and managing the risks to ensure that investors making investments in this sector of the property industry would understand and properly evaluate the risks associated with investments in this sector of the real estate industry. A fuzzy inference system model was used to determine impact of the risks associated with the industry. The findings showed that the majority of private student accommodation providers with a few years operating experience and minimal knowledge of the industry were highly exposed to cashflow, liquidity, regulatory and operational risks. Low rental income as a result of a NSFAS rental ceiling and delayed payments resulted in cashflow mismatches as the majority of the students were NSFAS funded. The research concludes by providing sustainable risk management strategies to address the anomaly of increasing demand and declining supply for private student private student accommodation in Bloemfontein.
Description
Dissertation (MBA (Business Administration))--University of the Free State, 2023
Keywords
Private student accommodation, risk management strategies, fuzzy inference model