The ever-growing demand for student accommodation will help drive real estate sector growth in Kenya, Zambia and South Africa in 2019, a new report has revealed.
In Kenya alone, the number of students is growing exponentially and current hostels cannot keep up with demand.
According to the Kenyan National Bureau of Statistics, the number of students in Kenya stood at 520,893 in 2017. With an expected growth of 15% in the population of 15 to 24 year-olds, this is likely to increase and operators in the student accommodation market already run near to full capacity.
The phenomenon is in fact, a continent-wide trend as a result of the demand for accommodation from the increasing number of university students throughout Africa.
It is, however, is especially evident in Kenya, Zambia and South Africa, according to the aptly-named Africa Horizons report, which was compiled by real estate agency, Knight Frank.
Property developers have been quick to cash in on the trend, such as Kenya-based Qwetu Limited, which has invested Ksh800 million (about$8 million) in two storey building state of the art hostels. The self-contained hostels located in Kenya’s Ruaraka and Jogoo Road area have a combined 734 rooms.
According to the report, there were an additional 2.5 million students in tertiary education in 2017 compared with 2012, according to the UNESCO Institute for Statistics – a 21% increase.
This is due to not only increasingly youthful populations, but also the commitment to raise the university participation rate in countries such as Kenya and South Africa as a way to increase economic growth and reduce inequality.
Over the next five-year period the number of students is likely to continue increasing significantly. An additional 72 million Africans will be aged between 15 and 24 years by 2028, with the highest growth – 13 million – in Nigeria.
Across Africa, however, the primary focus of many institutions is on growing their academic facilities and therefore they do not have the space or resource to develop their own accommodation. Increasingly, they are looking to collaborate with developers and landlords in joint ventures to provide suitable options.
“Adding impetus to this search is the growing compulsion for institutions to provide accommodation to maintain their university status. There is already a requirement in Kenya to own land and this will soon be enforced in Zambia and Uganda,” Knight Frank said in its analysis.
The research implies that a growing need for affordable, reliable student accommodation will indeed be a sound investment. Smart developers are already setting things in motion and expect significant returns in the years to come.