A dearth of student housing in the United States is not enough to attract investments by 138 Student Living (138 SL) Jamaica in that hard currency market, as the company focuses on recovery from pandemic conditions in Jamaica.

As reported by the Associated Press, in the United States college students squeezed by a massive housing shortage and rising rents are living in motels, commuting long distances or sleeping in their cars.

Chairman of 138 Student Living Ian Parsard indicated that the market opportunity is not one in which the company is currently interested. He stated, “At this time 138 is focused on getting its core business back to post-pandemic normalcy. A strategic development plan will be shared with stakeholders in due course — so nothing currently is imminent.”

138 Student Living Limited is the accommodation company which raised $500 million on the Jamaica Stock Exchange in December 2014, as part of its then plan to design, finance, construct, and operate 1,584 units of student accommodation in three development phases under a concession agreement with The University of the West Indies, Mona (UWI, Mona).

Now in its ninth year of operation, the group has faced student protests in recent weeks about mold and other maintenance issues.

Overall, however, the company states that it is in a post-pandemic recovery mode. Chairman Parsard, in his June quarter 2022 report, stated that since the lifting of the COVID-19 restrictions, the company has seen a rebound in the demand for short-term rentals, in particular group accommodations.

Short-term accommodation is one line of business developed to sustain the company in times when students are on break from classes. It has also emerged as a year-long source of income.

Parsard said: “During the quarter, we hosted more than fifteen groups.” He said also that there has been a steady increase in long-term occupancy.

The novel coronavirus pandemic had a negative impact on occupancy and revenues. Occupancy fell below 30 per cent and increased slowly as the UWI increased its number of face-to-face classes. Since the pandemic 138 Student Living has implemented strict safety measures as guided by the Ministry of Health and Wellness and the UWI, Mona.

Increasing occupancy

138 Student Living built and rents living facilities at the UWI under a 65 years concession agreement. The company has a subsidiary, 138SL Restoration Limited, which has a 35-year concession agreement also granted by the university.

Parsard said that as at June 2022, occupancy for the reporting quarter averaged 50 per cent. Under the concession agreement with the UWI, 138 Student Living is guaranteed a 90 per cent occupancy.

Parsard said in June that the UWI had signalled its intent to increase face-to-face course offerings. He outlined, “Our expectation is that applications for student long-term accommodations for the new academic year beginning September 1, 2022 will increase.”

For the three-month period ending June 30, 2022, the group recorded profit before taxation of $78.2 million and an after-tax profit of $85.2 million. Overall, for the nine-month period ending June 30, 2022, The group recorded profit before taxation of $220.7 million and an after-tax profit of $238.6 million.

The results benefitted from both variation claims relating to Irvine Hall and the UWI 90 per cent occupancy guarantee. Parsard, noting that revenue increased by 15 per cent for June quarter when compared to the corresponding period last year, said the increase was driven by an increase in occupancy under the short-term rentals programme and a general increase in room rates for long term residents.

He noted student receivables balances fell significantly as 138 Student Living continued to enforce strict collection measures. During the period under review, 138 Student Living operated 1,464 world-class rooms at its four (4) locations on the UWI, Mona campus consisting of 1,692 beds.