Property developers cash in on college students' hostels
19 September 2014, 08:18
Nairobi - Two weeks after the opening of Kenyatta University in Nairobi, Stephen Irungu, a caretaker at a private hostel near the institution is still receiving numerous enquiries from students seeking accommodation.
The students are in dire need of accommodation but Irungu cannot help because the four-story hostel he runs is full. And so are tens of others neighboring his, as demand for accommodation surpasses supply.
Rise in student population at the institution, the second biggest in Kenya, has given property developers huge business opportunities. The developers, who have built hostels close to the institution are cashing in on the boom, with rent rising two-fold in about two years.
"There is huge demand for hostels here that we cannot satisfy. The hostel I run accommodates over 100 students. It was filled on the second day of opening but students still come to enquire if there is space," said Irungu on Wednesday.
This is despite the owner of the property increasing the charges by about KES 500 this semester before students resumed their studies at the beginning of this month.
"We are now charging KES 11,600 per student for the double room for the three months they would be on campus. We raised the charges, but we are still overwhelmed by the numbers," Irungu said.
Rent for double rooms in the private hostels range from KES 9700 to KES 15,400 dollars.
"Students pay up-front before we allocate them the rooms to avoid challenges of monthly payments because they do not work. The rooms have beds, mattresses, table and chairs," said the hostel owner.
Students who stay in the hostels, however, pay thrice as much as their counterparts who live within the university. But they have no choice as there is limited accommodation within the university that normally hosts over 10,000 students at any time.
Also read: Hostel crisis at University of Nairobi
There are about 300,000 students in both private and public universities across Kenya, according to an economic survey.
"The other option is to live in neighboring estates but this comes with risks and extra costs because you have to commute every morning and evening. And you will not live with other students," said Irine Kombo, a third year sociology students.
The situation at Kenyatta University is replicated at other institutions of higher learning across the East African nation.
There are about 60 public and private universities across Kenya. Most of the public universities were constituent colleges and were established in the last five years as the government opened up the sector.
However, the institutions do not have enough accommodation, giving room for private developers to cash in on the hostel crisis.
"We are living 12 of us in a two-bedroom house which the owner converted into a hostel. Four of us are staying in the master bedroom, four others in the other bedroom and the rest in the sitting room. We have no choice," said David Wesonga, a student at Masinde Muliro University in Kakamega.
The students pay KES 6000 each for the hostel, earning the property developer KES 69,400 in three months. This is money that the landlord could not get in such a period if he had rented the house to a family at KES 9700.
Antony Kuyo of Avent Properties, a real estate consultancy firm in Nairobi, noted that universities have presented property developers in Kenya with the biggest opportunity ever.
"Developers would have built more hostels, the problem is that land near the institutions is scarce and prices have shot up," Kuyo said, noting many landlords with houses near the institutions have converted them to student hostels for high returns.
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