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Traders count losses as universities shut down tens of town campuses

By Jacinta Mutura | July 22nd 2019
Some of the business premises that were closed after Moi University shut its Eldoret West campus. Inset: Ramesh Shah inside the building he had rent out Kenyatta University before the satellite campus shut down. [Kelvin Tunoi, Kibata Kihu, Standard]

Ramesh Shah, a landlord in Nyeri, stares blankly at his deserted four-storey building in the town’s central business district.

A few months ago, the building was teeming with humanity and the rent was paid on time.

But that was then. The building along Kimathi Way is now a desolate shell; a pale shadow of what it was before Mr Shah’s deep-pocketed tenant moved out.

Shah had leased the building to Kenyatta University to set up a satellite campus, which was meant to serve students who were unable to study at the main campus.

The university moved in five years ago. In January this year, it moved out long before the expiry of a lease agreement.

Shah is among the hundreds of business people struggling to get back on their feet after satellite university campuses were closed down following a directive by then Education Cabinet Secretary Fred Matiang’i.

The CS’s order sounded the death knell for many campuses. For landlords like Shah, it also meant the end of a lucrative business as universities that had pitched tents across the country abruptly left town.

Stranded students

Thousands of students were left stranded while others sought transfers to other universities. Many relocated to main campuses out of town.

Hundreds of teaching and non-teaching staff was also rendered jobless.

For Shah, the sudden change of fortunes was as unexpected as it was painful.

“Kenyatta University management gave me a vacate notice sometime last year and in January this year, they closed down and vacated the building,” he said.

The businessman admits that losing his prime tenant has hit his business hard, especially because the building had specific designs to fit the needs of students and lecturers.

Now he has to get rid of the staircase and install an elevator. He has also been forced to hire workers to reconstruct the building’s interior.

“The structure was designed according to their specifications. Now I have to alter the design of the entire building before I let in other tenants who may not require the features. I am incurring quite a big loss and a lot of time has been spent to reconstruct it,” he said.

Shah said he estimated the works would cost him about Sh6 million. The amount, he added, could easily go down the drain because six months after KU left, no other tenant has expressed interest. 

“I am doing all this yet I am not guaranteed tenancy because business is not doing well in Nyeri.”

Shah says he still hopes that someone at KU will change their mind and re-open the campus especially now that the lease agreement had not lapsed.

“They told me if they get a chance they will come back. We are open to negotiations if they happen to return.”

Besides losing the tenancy, the investor told The Standard that he and a number of investors had big plans for the future, including constructing student hostels.

“I have land that I thought would suit a hostel but they left before we could actualise the plan. They had even sent architects from the university who had already prepared designs for students’ accommodation,” he said.

The university had about 600 students in its Nyeri campus. After its abrupt closure, some transferred to Embu campus and the university’s main campus.

A number of students from Nyeri, Nanyuki, Karatina and neighbouring towns who were pursuing post-graduate courses transfered to other universities.

But it was not KU alone that closed its doors in Nyeri. More than five universities, including Dedan Kimathi, Methodist, Karatina and Nairobi shut their satellite campuses in the county.

More closures

The closures were replicated in campuses in Karatina, Murang’a and Nanyuki where developers who had sunk millions of shillings to build premises to hire out to universities for lecture halls and hostels are still counting losses.

The towns’ economies have also been hit hard. Supermarkets, shops and transporters are feeling the pinch as thousands of students who spent millions of shillings in the towns simply packed their bags and left.

“We used to ferry many students but the exit of the campuses really affected us,” said Robert Warugongo, a boda boda operator.

The transporters would make a killing during the students’ busiest hours. But not anymore.

“We have never been able to get such a huge number of passengers. We used to be very busy between 11am and 5pm,” said Joseph Mwangi, a matatu driver

Even eateries have not been spared the pain of losing hundreds of dependable clients.

“We wish they would come back. Our target clients are working people and university staff used to get meals from here,” said Rachael Muthoni, a café owner.

The traders and investors are still struggling to get new clients after the exit of students and staff.

Margaret Karungaru from Mathira in Nyeri says it took her two years to get new tenants after Karatina University vacated her facility in 2017.

The university had devolved its Business School to Ragati near Karatina town, where it had a five-year tenancy agreement with Ms Karungaru.

Initially, the facility housed a primary school before Karatina University converted it to a town campus. It was a good deal for the landlady.

“I closed the academy because we had a good deal with the university. They occupied the facility for about five years when the agreement was about to lapse,” she said.

She is not alone in counting losses. Investigations by The Standard found that as soon as universities opened branches in a number of towns in the region, investors moved to build hostels, shops and supermarkets near the institutions.

Ten hostels

In Karungaru’s neighbourhood, more than ten hostels were built to accommodate university students. Most of them are now vacant.

“The institutions meant something to the local communities, which had become more vibrant and interactive,” she said.

Her building has since being let out to a Chinese company constructing a road in the area.

Another property manager, Teresiah Nyawira, said she was lucky to get tenants to occupy 30 vacant rooms after Karatina University closed its town campus.

“We only got tenants when construction of this road started. The houses had been vacant since students left,” said Ms Nyawira.

It is the same story in Nanyuki after Kenyatta, Karatina, Meru and Methodist universities closed shop.

The University of Nairobi and Jomo Kenyatta University of Agriculture and Technology also had learning centres that have since been shut down.

Abel Marite, the director of Marite Enterprises – an estate development company – had set aside two buildings for student hostels. But the closure of the campuses has sent him back to the drawing board.

“The buildings were designed for students. After they left, we had to redo the structures,” he said.

Nearby, KU and UoN had leased a building belonging to a local church. It has been taken over by new tenants while the former Karatina University campus premises has been converted to a hotel.

Marite’s company had started building another women’s hostel in Muthiga area. But construction did not go beyond the foundation and ground floor.

Like Shah in Nyeri and Karungaru in Karatina, Marite now has to change the designs of the buildings to accommodate other tenants.

“If I were to quantify the monthly income lost from the exit, it would be about Sh15 million,” he said.

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