New firm taps local learners hostel market
Steve Umidha @UmidhaSteve
The market for student accommodation is entering a boom period amid rising demand that could see rental prices for such housing models sprout in the near-term.
Besides traditional forms of rented accommodation such as hostels, paying guests and shared apartments, student living – a relatively new housing segment is fast gaining ground among start-ups who want to expand the number of beds across the country.
Best known as Student Housing, or purpose-built student accommodation, the concept refers to housing that has been designed specifically to meet the demands and requirements of today’s student.
The concept has gained much traction globally and has become a mainstream investment class asset getting more attention from institutional investors, especially in developed European markets and the United States.
“It is a housing segment that has remained untapped despite the immense opportunities the concept offers,” says Alice Mukami, a Nairobi-based real estate specialist.
At present, the student population in universities and vocational centres, according to Kenya National Bureau of statistcs 2019 Economic Survey, stood at 796,000 in 2017/18 and was expected to grow by 15.5 per cent to 919,400 in the 2018/19 academic year.
The numbers are set to increase as the university/college age demographic continues to grow.
The entry of Student Factory Africa, a consortium of architects, which has partnered with a Dutch-based private equity firm to launch a hostel project in Kenya, highlights the growing demand for such housing concepts among investors, funders and developers keen to fill the existing gap.
The venture’s 4,500-bed student accommodation will cost Sh5 billion and will be located in Karen, next to Catholic University of Africa. The hostels will be primarily for students from the University.
Expected to break ground in April and the first phase finished in 12 months, this will be the country’s second branded hostel after Acorn Group’s Qwetu, which launched in 2017.
Student Factory CEO Chris Osore said universities have highlighted the need for formalised student accommodation.
“These institutions have been asking for it. And it is just that investors have not been able to tap into that market,” Osore said when the firm signed an agreement with Betonbouw, a private equity firm that will provide close to a third of the financing for the project.
Student Factory plans to put up an estimated 4,800 of such housing units in 18 months which will be fitted with Wi-Fi, housekeeping and laundry services, app-enabled living in an air-conditioned environment and fresh and meals.