#LockdownLessons – Q&A with John Schooling

John Schooling

As part of their #LockdownLessons series, Bizcommunity reached out to South Africa’s top industry players to share their experience of the current Covid-19 crisis, how their organisations are navigating these unusual times, where the challenges and opportunities lie, and their industry outlook for the near future. They chatted with John Schooling, Director of STAG African to get his take. Read the full Q&A on Bizcommunity.

What was your initial response to the crisis/lockdown and has your experience of it been different to what you expected?

John Schooling: STAG African recognised the necessity of the lockdown in curbing the spread of Covid-19 and were happy to comply with government regulations to maintain the health and safety of the people who make up our company. Our initial response to the crisis was to increase hygiene practices at all building sites and ensure that workers were educated around the virus. When the lockdown was announced we had to put measures in place to shut down active construction until further instruction. On our already operational sites, STAG received an essential permit, which allowed us to continue carrying out important maintenance work.

Comment on the impact of the Covid-19 pandemic on your company or economy as a whole.

Schooling: As a result of lockdown, no construction work is being carried out at any of our building sites. This has had a profound effect on our cashflow, productivity and overall impact in terms of our goal of providing world-class student accommodation. Our main concern is that with construction halted, South Africa’s existing student housing crisis is likely to be exacerbated and this will have long term and far-reaching effects on every sector. As accommodation developments stall, next year will once again see students struggling to find suitable accommodation. In fact, we expect the situation to be more dire than in previous years. Student housing is key to student success, and the knock-on effect of less housing is less graduates, which means the economy will suffer an additional blow in the long-term.

As it stands, the economy has virtually ground to a halt and the impact is going to last for many years. A major ‘Marshall Plan’, far greater than the current R500bn, and a possible additional R500bn will be needed to get the economy going. Interest rates need to be lowered by another 1-2%, and money must be made available to stimulate industries, especially construction and property development, which have the potential to employ large numbers of workers very quickly.

On the 30th of April, higher education minister Blade Nzimande outlined the plans for the 2020 academic year. He acknowledged that the pandemic has created significant financial pressure on universities, especially in terms of the stalled infrastructure projects on campuses, including student residences. To unblock this, government has made a provision for controlled relaxation to enable stalled infrastructure projects to be resumed from the 1st of May, subject to adherence to strict health protocols.

How is your company responding to the crisis?

Schooling: Our response has been to continue to think long-term. Alleviating the student housing crisis by providing quality student housing remains our top priority, and we are doing our level best in pursuit of this, despite the challenges. STAG has made representation to the appropriate ministries to have its building sites deemed critical, as they indeed are. While our construction department has been badly affected, STAG has continued to purchase strategically located properties and prepared tender documents for important student accommodation developments. We have also entered into advanced negotiations to raise funds for student housing projects in Kenya, Malawi, Zambia and Lesotho.

Comment on the challenges and opportunities.

Schooling: Challenges have included not being able to visit sites that STAG wishes to build and having construction of critical facilities stopped. In particular, we are currently developing 2,047 student beds and a student centre at the University of Fort Hare (UFH), the largest student accommodation development ever undertaken by a public university in South Africa. This development is vitally important for student success at this university. The challenge we face is how to proceed in a way that takes into account the safety of workers, as well as the future of our nation’s students. In terms of opportunities, it is positive to see that it is now a buyers’ market, and property prices are becoming more realistic.