According to research by Jumia House, the rising student population in Africa outstrips available bed spaces in universities and colleges by nearly 300%. In other reports, the demand for additional student accommodation across sub-Saharan Africa is expected to exceed 500,000 beds in the next 5 years. Currently, public sector budgets have failed to address the mounting demands for student accommodation adequately. Local universities and colleges have also failed to sufficiently cater to the accommodation needs of a sprawling student population. In fact, these universities have struggled to keep existing student housing infrastructures in optimal habitable conditions.
However, this is changing student accommodation in Africa to a highly profitable class asset for local and international investors.
A Closer Look at the Current State of Student Accommodation in Africa
From 2000 to 2014, the rate of higher education uptake increased from 2000 to 2014. However, the provisions for student accommodation has been severely dwarfed by the rate of higher education uptake. Until date, very few universities, both public and private, can boast of their hostels and halls of residence. In most cases, the available accommodation in these universities have been run down and require extensive renovation and refurbishment. To boot, almost none of them are currently building or making any significant strides to address the problem.
Industry experts believe that the negative trend is going to worsen as the rate of enrollment in tertiary institutions is set to outstrip estimated figures. In Kenya, for instance, the shortage of student accommodation constitutes 40% of housing shortage in Kenya.
Besides, prospective investors usually hold their noses when accessing opportunities open in student accommodation due to the rowdiness and eccentric behaviors of many students. However, the crop of students in recent years have been predominantly inclined to show respect for institutions and facilities that serve their needs, including student accommodation. Most students today are well-groomed by well-to-do families and are sensible enough to respect terms and conditions attached to accommodations.
This welcome development, together with the glimmering prospects of economies in the continent, is precipitating a rush for student accommodation investments in the region.
The Glimmering Prospects of Student Housing Investments in Africa
Student accommodation is one of the most stable and secure investments there is. The enrollment of students in tertiary institutions is usually not significantly affected by political uncertainties, economic turmoil or even regional instability. No one wants to put a 5-year educational project on hold due to any circumstances, so the number of students tends fairly stable at all times. During break periods, the student rooms can be converted to hotel accommodation to maximize the profitability of the property.
Nevertheless, there are a few key factors that determine the prospects of student housing investments, chief among them, the location of the property. The accommodation needs to be situated in areas preferred for residence among students, including areas close the university campuses, landmarks or city center. The targeted market is also another key determinant of success in student accommodation investments. Experts believe it’s highly profitable to target a wide range of prices.