Nyeri town is on the fast lane of development as many institutions of higher learning set up satellite centres in the town, prompting development of hostels and other facilities. Above, an investor is putting up a hostel near Kimathi University College of Technology, which is outsourcing student accommodation. Joseph Kanyi
The government policy of delinking admission from bed capacity in universities and technical institutions is spurring rapid growth of property development in the country.
The policy aims at mobilising private sector resources in expanding the current bed capacity, freeing learning institutions to focus on their core business of education.
This is expected to help boost enrolment by an estimated 10 per cent in universities and 60 per cent in technical institutions.
With eight new constituent colleges set to receive full university status, and several technical institutions about to be upgraded to polytechnics, demand for student accommodation is set to skyrocket signalling great times for developers.
The constituent colleges are the main beneficiaries of the new policy since most do not have adequate capacity to accommodate their full student intakes. Established universities are also expected to utilise the policy to cater for the increased intakes.
The optimistic outlook for developers is further boosted by the anticipated double intake which is expected to put a strain on institutional resources especially student accommodation which requires intensive capital injection to put up. Double intake will reduce the two year wait for secondary school leavers joining university.
Bed capacity is expected to have expanded considerably by 2015 when the first group of beneficiaries of free primary education joins university. Kimathi University College of Technology located in Nyeri, a constituent college of Jomo Kenyatta University of Agriculture and Technology is one of the few institutions that is pioneering the new policy.
According to the principal, Prof J N Kioni, the institution made a strategic decision to fully implement the policy and outsource student accommodation when it enrolled its first degree students in 2007. The fledgling university college chose to focus all resources on education facilities and collaborate with investors and developers in the area to put up accommodation facilities.
“We couldn’t invest in accommodation. We focused on education facilities such as workshops, a library and lecture halls,” said Prof Kioni.
Initially, investors were sceptical about the project’s long term sustainability since no other university was doing this, noted Prof Kioni.
But with time, investors have risen to the challenge and have pumped hundreds of millions into developing hostel facilities.
“Some of them have invested heavily and have put up excellent facilities which are even better than what we have in other universities,” noted Prof Kioni.
To ensure developers construct quality facilities, the university college provides them with standard designs which guide them on the type of facilities required.
The hostels are required to provide adequate room space, beds and mattresses, wardrobes, clothes washing and hanging facilities, studying areas, adequate sanitation, entertainment areas and should meet required safety standards. The university college has set up an accreditation team which inspects new hostels and accredits them, allowing them to be recommended to parents and students.
“Facilities near the institution are always fully booked while others which are as far as 6 kilometres from the institution regularly receive students every semester,” noted Prof Kioni.
Students living in accredited hostels far from the university college receive subsidised transport from the institution’s fleet of buses. Mr Robert Njau one of the developers who has put up hostel facilities for students notes that the system being used by the institution is helping to promote the whole area’s development.
“The university is making the whole town to grow because it is bringing so many people here. Everyone is benefiting— from the shoe shiner, the hotel owners to those who have accommodation,” noted Mr Njau.
According to Prof Kioni, there is still huge potential for investors since the current population of 3,000 students is expected to reach 5,000 by end of 2012.
Expanding workforce
An expanding workforce which currently stands at 400 also provides big potential for developers due to their housing needs. The institution, along with other constituent colleges is also expected to receive full university status, heralding even better prospects for investors. The value of land near the institution has as a result of the developments shot up by more than 500 per cent since the institution started.
Mr Joseph Kihara, a real estate agent notes that “a quarter of an acre is now going for more than Sh1 million up from Sh200,000 a few years earlier.” According to Mr Kihara, formerly idle land near the institution has now become attractive to investors, due to the new facilities.
“The hostels are improving development and making some of these rural places very attractive. One can now invest in these places,” said the estate agent. Other institutions such as Nairobi University, Kenyatta University, and the Kenya Methodist University which are opening branches in town are also pushing up demand for hostel accommodation in the area.
The Kenya Institute of Management which is also increasing its student intake every year relies on hostels to host its students. Ms Eunice Mureithi the Nyeri branch executive noted that accommodation has been a big challenge for the institution.
“More than 50 per cent of our students are girls and need good accommodation so we have to shop around for hostels and then avail the information to students,” noted Ms Mureithi. According to the branch executive, competition among hostel accommodation providers has served to lift standards. Some developers are providing free internet, good studying facilities, and several meal options in order to attract students.
Other businesses that are benefiting from the new institutions are hotels, transporters, computer service providers and general shops.
The high cost of some of the facilities is however posing a major challenge to the system, with prices ranging from Sh3,000 to Sh5,000 per student per month which includes meals.
Some of the students who are eager to save are consequently going for unaccredited hostels or are renting out general houses in the area and sharing out rent and other general expenses.
Challenges faced
Ms Mureithi, noted that some parents find the costs too high and cannot afford. Providing meals for students is also a major challenge for the developers since for most it involves venturing into a line they do not have any experience in. Some are opting to outsource meal provision to hotels.
Another challenge is the pressure which is being exerted on already overstretched rental housing as some landlords convert their rental facilities to hostels. “Some landlords are converting from rental houses into hostels which is exerting more pressure on housing facilities,” noted Mr Kihara. The seasonality of students is also a major challenge to some investors who require predictable revenue flows.
“Every semester we used to begin looking for new students because the others had gone home and only a few had come back,” said Mr Duncan Kinyua who had to close down his 160 bed hostel facility due to inconsistent revenue flows.
“I have now reconverted back to tenant houses since I want to have predictable flows in income,” said Mr Kinyua.
Despite the initial teething problems the system is facing, it is still a major boost to the tertiary education system in Kenya and marks another success in the ongoing public private partnership being implemented by government.
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