Student housing developer 138 Student Living (138SL) marginally grew profit to $343 million for the financial year ending September 2023 marking another record year for the company.

It’s also the second consecutive year of growth for 138SL, following a significant fall-off in rental income during the height of the COVID-19 pandemic when most students had to be lectured online amid gathering restrictions.

Over the 2023 financial year, 138SL’s core revenue rose 9 per cent to $1.3 billion, 92 per cent of which came from long-term rentals and the remainder from short-term rentals.

The steady growth in earnings for the student housing developer comes amid improved relations between 138SL and partner company The University of the West Indies, Mona (The UWI) and greater focus on its short-term rental business.

Two years ago, 138SL and The UWI Mona signed off on an agreement for the revision of a financial model previously agreed upon in 2015, to better reflect building renovation works carried out by 138SL affiliated company 138SL Restoration. Prior to the revision, 138SL and The UWI were at loggerheads about a change in building renovation works carried out by 138SL-affiliated company 138SL Restoration, which in turn affected the number of residences and students housed.

Under that concession agreement, The UWI has guaranteed a minimum of 90 per cent occupancy of available rooms in any 51 weeks period for as long as the concession agreement is in place. If that was not realised from normal operations, then 138SL can claim the monies from the university.

“It doesn’t mean that our claims from UWI will be higher or lower, but what it means is that we now have a financial model that has been revised by the consultants who developed the 2015. We are on a better footing, because now it’s not just 138SL’s opinion versus UWI’s opinion, but our claims will be based on something that’s in black and white,” chairman of 138SL Ian Parsard told the Jamaica Observer.

He added that the companies have been referencing the revised model for claims made from The UWI over the past 18 months.

138SL closed the 2023 financial year with receivables of $597 million from The UWI, Mona against $481 million for FY 2022.

As earnings improve, 138SL is also bullish on clearing its debt stock alongside expanding its business at The UWI before looking outside of Jamaica. It recently went to market for a raise of $2.15 billion but managed to only raise the minimum amount at just above $500 million.

“We knew that the investment climate is tough at this time as the rising interest rates have softened the equities market, but we thought that folks would have seen the long-term stability of 138SL as well as the significant improvement that we have seen throughout COVID and after COVID,” Parsard said.

He added that the board of directors will meet about the next steps to achieve the plans now on the table.