Off-campus policies fuel student housing boom
The ‘good times’ may be here for private investors and real estate developers, following fresh opportunities and high demand for increasingly Purpose-Built Student Accommodation (PBSA) in the country.
There has been an incredible growth in students housing sector due to increase in the number of students admitted to tertiary institutions and the off-campus policies existing in most of the schools. Some of these facilities offer affordable and community experience for students.
Besides, the preference by the wealthy for luxurious and expensive accommodations has also drawn a considerable number of new players into the space. Recently, some investors have delved into hotel-style facilities such as gyms, pools, private cinema screens and concierge services to attract the well-to-do students.
In new designs, shared bathrooms are a thing of the past in most new developments and many contain studio bedrooms with a bathroom, kitchenette and living space as well as a bed and desk.
The Guardian learnt that some developers that are facing hard times with residential and commercial developments are diversifying their portfolio as student housing seem to provide higher yield rates than in traditional asset classes and considered as a recession resilient asset.
Despite the fact that student housing is a big business with relatively low risk, Nigerian investment volumes is still low compared to other countries. In fact, the inability to get purpose built facilities has made many students seek refuge in residential areas devoid of student life.
Confirming the development in the industry, the Second Vice President, Nigerian Institute of Town Planners, Mr. Toyin Ayinde said: “the boom in student housing is a natural consequence of the increasing number of tertiary institutions, a corresponding increase in the number of students they admit and the inevitable demand for accommodation of the students.
“The increase in those institutions is also a factor of the continuous population explosion of the nation in general. Most institutions are finding it difficult to provide for accommodation, especially at a rate that is affordable for the average student.
Consequently, he said, students have been left to fend for themselves. “This situation creates a window of opportunity to investors in students’ housing, but now, at a cost that makes the investor profit from his/her investment.
Ayinde, explained that initially, they were like make-shift, the conversion of existing tenement (room by room) houses. Over time, purpose-built students’ hostels have emerged. “There are regulations, which take care of such developments, and they would differ from state to state. It falls under residential use, a special type because it is designed to address a class of population.
“Details of design and construction lie within purview of surveying, architecture, engineering and building, but ultimately, all of these services must fit into the general physical development plan delivered by the urban planning system.
“There are institutions that make specific provision for land for such development that the investor buys into, probably within the campus. In other cases investors take advantage of the inadequacy, source for land and provide the facility. In whatever manner it takes, the services of the relevant professionals must be engaged to achieve a sustainable development,”Ayinde added.
Also, the Second Vice President, Nigeria Institute of Architects (NIA) Enyi Ben-Eboh, agreed that the development is due to the increase in the number of higher institutions and the corresponding rise in the population of youths seeking higher education.
“This is however occurring against a backdrop of an inversely proportional increase in the requisite housing infrastructure as most governments and proprietors of such schools would rather focus on learning facilities against boarding.
“This has therefore created a vacuum which is being filled by the private sector as a viable investment with high returns on investment.”
He said that over the years, architects have been encouraged to explore the value chain of the profession by venturing into property development.
Ben-Eboh revealed that a number of architects are already taking advantage of the opportunities. On the issue of standards, he said, the relevant codes are available to regulate design standards for functionality and comfort. “Each state has design guidelines and minimum standards for such occupancy which need to be met before approval is given to construct,” he added.
One of the Nigeria’s leading firms in purpose-built student accommodation platform is Student Accommod8. The company completed pine House that services University of Lagos and Yabatech students. Another two new student accommodation developments, Sycamore House (192 beds) and Cedar House (140 beds) situated in Olabisi Onabanjo University, Ogun State and Pan Atlantic University, Lekki-Epe expressway was unveiled recently.
The Founder and CEO of Student Accommod8, Abayomi Onasanya said the attraction to the firm, is the growth in student population across the country, hence their intervention to solve these issues.
He said: “Our hostels are strategically placed close to universities or within university’s campus and each hostel comes equipped with all the necessary facilities every student needs to feel at home away from home.” Onasanya said the company answered clarion calls to invest in students’ accommodation – not just the buildings, but to invest in the experience so that students can worry less about light, security, water and focus more on their studies.
Onasanya revealed that the company funds its projects from equity. “We have venture capitals investors who have invested into the equity of our business. Student accommodation is a high yielding asset, and you can typically earn returns within the first three to five years. ”
Speaking during the commissioning of Cedar House, the Vice Chancellor of Pan Atlantic University, Prof. Juan Elegido stated that the university believes that whilst education is given in the classrooms, a lot of education is acquired through social interactions within the hostels and Student Accommod8 has succeeded in creating a community amongst the students.
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