City developer redefines student accommodation
By Peter Theuri | February 18th 2021
Many on-campus living quarters for students are not known for comfort; they are spartan at best.
But this perspective is changing, with developers pulling all stops to make the experience for university and college students as comfortable as possible.
One such firm is Acorn Holdings Africa, the developer behind Qwetu purpose-built student accommodation facilities that promises to give residents “a home away from home.”
According to Acorn, the idea was informed by the need to address students’ changing needs and rising demand for premium student accommodation facilities.
“The global student housing market has shown incredible growth in the past few years, rising from $2.5 billion in 2007 to $17.2 billion in 2018, according to the 2019 Global Student Property Report by Knight Frank,” said Acorn on its model.
“This meteoric rise in the value of student housing is driven by an increase in the number of tertiary institutions, and a youthful global population that spells increased enrolment in universities and colleges. Kenya maintains the same trend, having witnessed exponential growth in university and college enrolment over time.”
And now Acorn Investment Management Ltd (AIML), a subsidiary of Acorn Holding, has launched a pair of Real Estate Investment Trusts (REITs) that will allow investors to get into the student housing market. A real estate investment trust is a company that owns, and in most cases, operates income-producing real estate.
REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centres, hotels and commercial forests.
For the investor, these private hostels create a chance to tap into a lucrative market as students escape tough on-campus living conditions.
In 2020, the total addressable market size for Qwetu was 45,000 beds.
With occupancy at 2,300 beds, Qwetu accounted for only five per cent of the total addressable market, leaving a huge untapped potential in student accommodation.
Acorn reports that universities are only able to house an average of 22.6 per cent of their student population on their campuses. This means that no university in Kenya has adequate accommodation to house its students.
“The lucky few who find on-campus accommodation still report difficult living conditions. Poor hygiene standards and complaints of bedbug infestations are rife within student accommodation halls,” said Acorn. Erick Obuom, the founder of architectural firm InfoAfrica Group and Mighty Roofing said modern college and university students need privacy and freedom.
“Most of these students prefer private hostels because they offer privacy and are more secure. The sense of hygiene in private hostels makes even parents want their children in such an environment,” said Mr Obuom.
These private accommodations, he added, also create a homely environment compared to the congested ordinary student living facilities.
Doris, a student at Strathmore University, cites proximity as the major reason for choosing Qwetu Hostels. “At Qwetu, you just move in because they are already furnished. We also have gyms, pool tables, study areas and TV lounges,” said Doris.
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