Providing student housing is a lucrative venture

chika ebuzor

May 29, 2015 9:57 PM

The Department of Higher Education in South Africa says the unavailability of hostel accommodation is the major cause of high rate of dropouts from most universities.

Providing student housing is a lucrative venture.

These days, most institutions of higher learning are outsourcing the construction of student hostels to private property firms.

The need for more hostels and the new trend of outsourcing hostel construction has created an opportunity for real estate businesses.

According to Department of Higher Education’s Ministerial Review of South Africa’s University accommodation, most university hostels are old and dilapidated.

If that is the case in South Africa, then Nigerian real estate business men are in for the time of their lives.

Shedding more light on the report, Ken Reynolds, Regional Executive of Nedbank Corporate Property Finance in Gauteng said “According to statistics from the Department, out of a student population of 530 000, there is currently only enough student accommodation for 100 000 students – this barely meets 18% of the demand. As the demand for student accommodation far outweighs supply, there are excellent investment opportunities available in this market.”

He also added that ‘As a result, we may see the establishment of a new real estate investment trust dedicated to providing student accommodation in the future. And, although the buy-to-let market is currently depressed, student accommodation is one section of this market that is proving to be an excellent buy-to-let option for private investors, usually for a relatively small capital outlay.’

Property investors should take advantage of this lucrative sub-sector in Nigeria.

chika ebuzor