Student Accommod8 is Nigeria's first and only student accommodation brand providing purpose built student accommodation (PBSA) to Nigeria and West Africa.
Private investors are increasingly trying to plug the accommodation gaps in some tertiary institutions of learning by investing in on-campus hotels.
Student Accommod8, which provides purpose-built student
accommodation, is one of the companies maximising the opportunities created by
the poor state of many on-campus hotels across tertiary institutions in the
country.
The firm has invested in student hostels at Pan African
University; Ogun State University, Ago-Iwoye; and Obafemi Awolowo University,
Ile-Ife, among others.
“This investment asset gives about 22 percent returns, which
are more than double what commercial real estate gives, not to talk of
residential real estate, which gives 4-5 percent returns per annum. For this
reason, we are encouraging other developers to come in,” Abayomi Onasanya,
founder and chief executive officer of Student Accommod8, said.
Godwin Asuelimen, head of core product at Propertypro.ng,
described investment in student hostels as “very viable”, especially in areas
with a high number of tertiary institutions.
“It is a booming market and something that is growing at the
moment. You see a lot of people investing, especially off-campus. It has been
higher in areas that have booming student populations like Lagos, Benin, Enugu,
and Port-Harcourt,” he said.
Recently, Femi Gbajabiamila, chief of staff to the
president, handed over a 484-bed hall of residence to the University of Lagos
in an effort to alleviate the institution’s on-campus bed space crisis.
Nigeria has over 1.8 million full-time undergraduate
university students, according to Statista. This report excludes students in
polytechnics and monotechnics.
According to the Joint Admission and Matriculation Board,
about 1,595,773 candidates applied for the 2023 Unified Tertiary Matriculation
Examination.
Stanley Boroh, a lecturer at Federal University, Otuoke in
Bayelsa State, said that accommodation is a major challenge in the university,
adding that most universities cannot provide bed spaces for all the students.
Mordecai Ezeh, a developer based in Owerri, sees the
on-campus accommodation business as a worthwhile long-term investment
opportunity waiting for investors.
“If corporate firms or individuals get their acts right with
a good understanding of where and how to invest in campus housing, it is a
worthwhile venture,” he said.
Taiye Fatimehin, a Lagos-based developer, said that
individuals can come in by building new hostels and/or renovating the old ones.
He said: “Individuals can get involved by building,
renovating, and/or equipping hotels with basic facilities. They can also invest
in providing alternative power sources to minimise energy costs.
“But there must be flexible payment options designed to
ensure smooth operation of the system such as outright, weekly, or monthly
payment structures.”
Eugene Nweke, a civil engineer based in Benin City,
described the opportunities as very lucrative to tap but pointed out that
funding is a major issue.
“It is a viable business, but the issue is capital; how do
we raise loans with low-interest rates. We used to have People’s Bank
supporting investors then, but that has changed,” he said.
Nweke reiterated that such investment comes with its
challenges. “Student hostel business has not really developed in Nigeria. There
are a lot of setbacks faced in the venture such as high cost of building
materials, the length of time it takes to get such projects approved by the
government, and lack of funds on the part of the investors, among others,” he
said.
Mismanagement and corruption have been identified among
factors behind the housing crisis in most tertiary institutions.
Destiny Iyama, a student at the University of Ilorin,
decried the difficulty students face in getting on-campus bed spaces. “Hostel
cost is hiked due to the influence of some private owners who are bent on
recovering every dime spent on the building in a short time,” he said.
“This trend of privatisation of public hostels will only
lead to the gentrification of the university environment pushing the poor
majority out of school, especially with the fee regime imposed by the school
management on students,” another student said.