South African Aengus Properties to build student hostels

Hostel project Maasai Mara
A hostel under construction at Maasai Mara University in Narok. PHOTO/FILE
A South African property developer Aengus Investment Properties has announced plans to venture into the Kenyan real estate sector, mainly building students hostels.

Kenya is among five Africa countries in which Aengus Properties is planning to invest Sh25 billion in student hostels over the next five years.

Other countries that are experiencing a huge demand-supply mismatch of student accommodation include Ghana, Zambia, Uganda, Lesotho and Botswana.

Kenya alone, according to Aengus has a deficit of 350,000 beds.

“Aengus is currently bidding for 15,000 beds at two different public universities in Kenya as well as being in the feasibility stage of a 3,000 bed facility for a private institution in Zambia,” the firm’s manager of Africa projects James Huff said the statement.

According to Mr Huff, African universities have the land but they do not have funding and the expertise to build and manage students hostels.

Aengus said it will use modern construction technologies that will enable it to put up hostels at a faster rate and lower cost.

The hostels will be put up on a build-operate-transfer (BOT) model where an investor puts up a facility and collects rent for 15-20 years before handing the building back to the owners.

The South African company will operate the hostels for 25 years before handing them over to the respective universities.

Aengus’ announcement comes barely two months after another South African company Stanlib announced it had established a fund to cater for investment in commercial property developments in Kenya and Nigeria (read article).

The rapid expansion of local public universities has created a surge in demand for student accommodation – leading to a steep rise in rents charged by developers.

Official statistics show that student enrolment in local public universities stood at 157,916 last year, a 62.6 per cent increase from 97,107 in 2007.

Kenyatta (KU) and Maseno universities recently announced they were seeking investors to build hostels for their growing number of students.

(Read: KU, Maseno seek investors to build hostels)

KU is seeking for investors to build a Sh1 billion housing complex for its students through Public Private Partnerships (PPPs).

On the other hand Maseno is seeking to partner with developers to build hostels at its main campus, mainly to cater for the needs of its first year students.