The Booming Business of Student Housing in Kenya

Student housing in Kenya has become a lucrative business due to high returns, driven by population growth and increased demand for higher education. Despite campus expansions, universities struggle to accommodate the rising student population, creating an opportunity for private developers.

2. Private Developers Addressing the Shortfall

Private developers like Acorn Group Holdings have seized the opportunity, constructing branded, private student accommodations such as Qwetu and Qejani hostels. These hostels offer amenities like study rooms, gyms, and Wi-Fi. However, the private options are often costly for students.

3. Education Sector’s Housing Shortfall Challenge

Kenya and other African countries allocate a significant portion of their GDP (5.5% to 13.9%) to education, yet there is a 40% shortfall in student accommodation, contributing to the country’s overall housing shortage. Only 25% of students across 31 universities in Kenya can be accommodated on campus.

4. Public-Private Partnerships (PPP) as a Solution

To address the housing shortage, universities are exploring the PPP model. Developers build and operate hostels for about 20 years, recovering their investment before transferring the facility to the university. This model is gaining global recognition as a favorable avenue for investors in the public education sector.

5. The Kenyan Government’s Initiative

The Kenyan government is seeking investors for a Sh20 billion student housing scheme, targeting 30,000-bed spaces in three public universities—Moi University, South Eastern Kenya University (SEKU), and Embu University. Other institutions, including Egerton University, Maseno University, and Jomo Kenyatta University of Agricultural Technology (JKUAT), seek approval for PPPs to add a combined 60,000 beds.

6. PPP Benefits in Education Infrastructure

The PPP model, favored for its ability to tie in the operation and maintenance aspects, ensures that facilities remain in excellent condition throughout the contract’s duration. The Kenyan government’s investor conference aims to attract funding for the student housing scheme, emphasizing the potential of PPPs to alleviate the student accommodation shortage.