Investors reap from housing students business

A few years ago in Karen, there were not so many housing units but the increase of colleges has seen the influx of many students, writes JECKONIA OTIENOThey had the option to build high-class residential houses for the working class but instead they opted to provide shelter for the younger generation. These investors would have gone the way others have done bearing in mind that Nairobi has a serious shortage of housing units which has forced many to move to the informal settlements such as Kibera, Mathare, Mukuru and Korogocho.A few years ago in Karen, there were not so many housing units but the increase of educational Simon Ngure, Real Esate Investorinstitutions has seen the influx of many students. A number of these students come from far that they cannot make to and from college to their homes every day. This has forced them to seek alternative accommodation away from home. With this influx, many housing units or hostels for students are coming up.&#8239;It is for this very reason that Simon Ngure, Peter Miti and Francis Muthukia decided to channel their investments towards providing shelter to the many students. While there was initially just one institution, others have sprung up and this has pushed the need for student accommodation to new unprecedented levels.These three investors saw this need and decided to pursue this line of investment; they now have housing specifically for students cutting from the high-end to the low-end of the market.Ngure is among the first investors to provide housing for students in the area. Product typeNgure says that when he settled in Karen there was only one university, Catholic University of Eastern Africa (CUEA), which was not as big as it is today. He points out that by then land rates were not as high as they are today."I recall clearly that a half an acre of land would go for Sh50,000 in 1981 in this area but this started changing as the years flew past," notes Ngure. The current price of half an acre parcel stands at a staggering Sh18 million and continues to rise.Ngure came to realise that there was a shortage of housing for students when they kept asking if he had any rooms they could rent. He decided to put up prefabricated buildings for students to stay. The rooms have served students from different areas and institutions and now Ngure says that he has a plan to construct a fully-fledged hostel.Miti bought his half-acre parcel of land in Karen in 2000; the initial price was Sh1.75 million but by the time he was completing the payment, he had paid more due to inflation. By then, he says, the least the land could be subdivided in the area was five acres but this has since changed to half an acre. His decision to buy the property was necessitated by the need to be closer to where his wife worked at CUEA. By the time he finished building, she had gotten a job somewhere else far from Karen. He decided to set up a hostel and this was the start of Compass Hostel.He quit his job in 2004 and vowed never to be employed again because he wanted to be the employer; ever since he has never looked back.Unlike Ngure’s prefabs, Miti set up permanent blocks with 40 rooms and decided to offer a complete package whereby students are transported to school and back. They are also offered meals within the hostel. He says this helps them bond together as family."Serving people gives me pleasure, especially young people because they are easy to mould," he states.The story of Compass Hostel starts from somewhere as he had five minibuses and a school. These are the investments that built the hostel.To ensure that the students have the best accommodation, he has put up an 80,000 litre water tank so that the hostel does not suffer Nairobi’s incessant water shortages.Miti targets the high-end of the market because the rooms are self-contained with tiled floors and paved walkways. Within the compound also stand well-manicured flower gardens. He provides even the beddings and laundry services unlike many others who provide accommodation for students.&#8239;Francis Muthukia also set up a number of housing units on his piece of land to accommodate students. His motivation was to help students who are not from well-off families to be near the learning institutions. He, therefore, set up Greenview Hostel beside his residential compound. &#8239;Says Muthukia: "I realised that not all students were from rich families hence they could not afford the high-end hostels so I decided to provide cheaper housing for them."Product type&#8239;Like Ngure, he does not provide meals for the students and they have to bring their own items for use like beds, mattresses. Apart from students, Greenview also houses young people who have just graduated and are trying to find their footing in life.&#8239;Why did they choose students other than just building apartments for people to rent?&#8239;Muthukia says that he had that option in mind but realised there are so many students from backgrounds that are not able to put up in expensive hostels. He therefore says he put up the single rooms so that students who cannot afford self-contained hostels are not left out of studies simply because they cannot afford accommodation.&#8239;Having been a lecturer, Miti says he realised that he understood students better than adults. &#8239;&#8239;"A married person is easy to change but a student can be counselled and they will listen to you and that is why I decided to invest for them," says Miti.&#8239;Ngure is also of the opinion that dealing with people who have families is difficult; he therefore finds it easier to deal with young people because there are not many squabbles because of their busy schedules at school during the day.&#8239;Ngure, Miti and Muthukia say that for them these students are part of their families. The fact that each one of them stays within the same compound with the students attests to this. They have rules which govern co-existence so that the students would do anything they want anytime.Security is of utmost importance to these investors because they are housing young people who are not their children. &#8239;Ngure says, "For security reasons, there is a benchmark on when a student can come in." Miti is also of the same view when he states that the youth just need to be understood. He observes that young people who stay away from home need a parental figure to care for them so that they do not delve into waywardness.&#8239;"This means that they have to be guided and shown the right path because it is a very critical age in their lives," he notes.&#8239;They agree that even as they deal with the student community, problems are bound to rise and when they do there have to be proper mechanisms to deal with them without necessarily going overboard.&#8239;However, there is a flip side to this boom that has struck Karen. As more and more structures come up, many people flock into the estate, which was initially known for a thin population. Ngure says that as more people move from the town centre to set up business in the suburbs, people from the suburb are relocating to less populated areas like the plains of Kitengela. Some are moving to as far as Konza. These investors know too well that more hostels have sprung up, therefore, they have to contend with competition.

Investors reap from housing students business

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Investors reap from housing students business

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