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Student housing investors bear the brunt of Covid-19

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Student Housing, or Purpose-Built Student Accommodation (PBSA), refers to housing that has been designed specifically to meet the demands and requirements of the modern-day student. The concept has gained much traction globally and has become a mainstream investment class asset gaining more attention from institutional investors.

Tilda Mwai a researcher at Knight Frank says investment in housing for students in the entire East African region has continued to drive the real estate sector and the gap is far from being closed.

This is backed by another survey by Cytonn Real Estate firm, which indicates that the demand-supply gap between student accommodation and student enrolment continues to widen every year.

Edwin Dande the CEO at Cytonn Real Estate says other factors influencing the growth include high rental yields in comparison to other assets, and the sub-sectors stability even in times of economic downturns. “All universities in Kenya are experiencing an acute student housing shortage. The existing capacity is limited and new developments have ultimately not kept pace with the growth in enrolment,” Dande quotes the survey, which was conducted across Parklands, Ruiru, Kahawa Sukari, Thome, Juja, Rongai, Athi River where major universities are located.

Edwin Dande the CEO at Cytonn Real Estate

Wide gap According to the Ministry of Education, last year alone 919,400 students were enrolled in the country’s 67 universities and vocational colleges. Yet student housing provided by universities stands at approximately 300,000 units countrywide, serving just 22.6 per cent of the student population, while 10 per cent commute from their homes.

READ ALSO:   Why off-plan housing might be on its deathbed

The underserved gap in student housing is most severe in Nairobi, which hosts the majority of the country’s major universities, including Kenyatta University, University of Nairobi and JKUAT, as well as some of its private universities, such as United States International University and Strathmore University.

Overall, the city accounts for 43.1 per cent of the country’s total student enrolment.

Currently, less than 25 per cent of the current demand is met by university-operated supply. As such, the student housing market in Kenya is driven by a large volume of private owners with relatively small portfolios of offcampus hostels, where the quality of accommodation is often way below what students want, or expect.

For developers moving to serve this missing segment, the yields are among the highest currently available in real estate, with student accommodation normally offering individual rooms around shared facilities, and thus generating multiple rental streams per shared unit.

Investor experiences “I took a loan and built hostels that bring me Sh250,000 every month. The cost of land along the Nairobi-Thika highway was also affordable bacause the road had not been expanded,” says the owner of Ndarugo hostels,

Fredrick Gichangi.

The Electrical Engineering university don is one of the student housing early investors who have been smiling all the way to the bank, well, until the Covid-19 pandemic broke out.

READ ALSO:   Why off-plan housing might be on its deathbed

Closure of learning institutions saw students leave his property and his monthly income dropped to Sh6,000 per month, and only if he is lucky.

George Ngatia, the proprietor of Executive Hostels on the other hand has since adopted a new business model to survive. He has turned the hostel kitchen into an eatery.

Ngatia who took a bank loan to put up the accommodation for students says his monthly income went down from ShW0,000 a month to Sh12,000.

Costs of sanitisers and fumigation to prevent the spread of corona virus in his property has made profits hard to make besides the drop of students, according to Cheptowek Bor, another investor in the periphery of Moi University, Eldodret.

Student numbers may be suppressed by the fall-out from the current pandemic, as newly jobless or income-impaired parents may no longer be able to afford fees, as the government’s funds for Higher Education Loans Board loans may become cramped, and as the universities, too, make changes to cope with the dropped income from this academic year.

In the post-Covid-19 era, Mwai suggests developers and operators identify and prioritise the elements in student housing that are most important to students.

This should be beyond physical school attendance while factoring in affordability as developers aim to provide the highest quality accommodation possible and a cushion package from authorities.

READ ALSO:   Why off-plan housing might be on its deathbed

On the brighter side, Mwai says the pandemic has put into sharp focus the expanded skillset now necessary for real estate success. “To reach fruition, real estate projects now require advanced financial acumen and support as illustrated by Kenya’s innovative venture into the student housing market earlier on in the year,” he notes.

However, for the more than 2,000 completed units, the annual return is expected to take a hit as universities closed abruptly in March with reopening dates scheduled for January 2021.

Ongoing developments have also slowed down due to the supply chain disruptions and public transport restrictions.

by PD.co.ke

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Lifestyle

Crocodile displays woman’s body clenched in its jaws after killing her

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Locals have been camping at the bank of River Kuja in Ndhiwa, Homa Bay County since Friday in search of the body of a 37-year-old woman who was attacked and killed by a crocodile.

The reptile is reported to have disappeared with Millicent Akoth’s body after killing her before emerging from the water with the body clenched in its jaws and disappearing again.

Akoth had gone to fetch water when the large crocodile “pounced” on her throwing her in the deep part of the river before biting her, according to witnesses.

West Kabuoch Location Chief Joseph Ogur said the crocodile disguised itself as stone, making it impossible for the woman to notice it.

“The lady fell into the water and the reptile attacked her before it carried her body and ‘displayed it’ a few minutes later before disappearing with it,” said Ogur.

Locals say the reptile was last seen at around 4:30pm on Friday displaying the body before disappearing into an unknown part of the river at 4.30 pm.

The mother of three children was in the company of one of her children when the incident occurred.

Her family, friends and relatives, however, remain optimistic that they will retrieve the body.

READ ALSO:   Why off-plan housing might be on its deathbed

The residents Manyuru village, West Kabuoch Location have complained of attacks by wild animals in the area.

By Standard.co.ke

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Entertainment

TV host Joyce Maina denies dating DJ Mo: “I’m not dumb to post a married man”

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Switch TV’s Joyce Maina has refuted rumours of her having an affair with renowned DJ Sammy Muraya alias DJ Mo.

There have been allegations about the two being together but Joyce has labeled it hearsay and fake news.

Sharing her side of the story, the TV host shared messages on her Instagram Stories asking if guys thought she was dumb enough to post pictures of a married man.

“How dumb do you think I am to post a married man (not that I’d ever be with one) on my IG,” she wrote.

Joyce found the news hilarious adding guys just mistook a person that was holding her, in a trendy photo, to be DJ Mo.

“Fake news is actually hilarious. So you guys went from not knowing what the man looks like (you just have a blurry photo that makes him look like a shadow), and now all over sudden its DJ Mo? Lol,” Joyce added.

The TV girl must have found the news hilarious and wondered why people would want to tarnish her reputation with such allegations.

Size 8’s take on cheating

Back in 2017, TUKO.co.ke reported on a story where Size 8 claimed that one should be ready to forgive the other when he/she cheats in marriage.

READ ALSO:   Why off-plan housing might be on its deathbed

Speaking during a recording of their vlog, the singer said that partners should always be ready to forgive each other in a relationship even when cheating occurs.

“And whoever says they cannot forgive, that is a root of pride,” she said. “Who tells you cannot do that?”

She told her fans cheating shouldn’t be allowed in marriages but in case it happens, couples should find a way to get past it.

“So when your spouse cheats, remember you cheat on God all the time but God forgives you. So forgive your spouse,” she added.

by Tuko.co.ke

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Business

The Sun is now Setting on your Chance to be Part of Amani Ridge the Place of Peace

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With only 26 plots measuring 1/4 acres remaining, the window to own a plot of land at Amani Ridge the Place of Peace is now closing. As this is happening, the cost of these plots is now set to move up by 20%.

Here is the good news though; you still have a chance to secure your property before this change takes effect.

As this window slowly closes, the value additions are tripling as we are now headed to start internal roads murruming before we finally lay cabro on the same streets. On the other hand, the Kenya Power contract to lay underground power is right on the heels.

At the same time, the Razor Wire installation on Wall of Happiness and Wall not Knowledge (1.4Km in length) is also set to start next week.

Meanwhile, we are heartily celebrating the completion of the four walls surrounding this top gated community in Kiambu (Wall of Peace, Wall of Wisdom, Wall of Happiness and Wall of Knowledge).

As we share this update, the laying of paving blocks (cabro) on a one acre gate-area is ongoing as you see on the accompanying photo.

This cabro works on the estate’s driveway has been designed to give all families and visitors coming into this gated community an inviting welcome.

READ ALSO:   Why off-plan housing might be on its deathbed

Do you want to know how to be part of Optiven Family?

Call us now: 0790300300 or 0723400500
Website: www.optiven.co.ke

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