State courts private investors in Sh20bn student hostels project

A well utilised living space.
Government plans to add 30,000 bed spaces in three public universities.
The Kenyan government is courting wealthy investors to provide financial boost to its Sh20 billion student hostels project that seeks to bridge the country’s massive gaps in the supply of bed spaces for public university students.

Officials from the National Treasury’s Public Private Partnership (PPP) Unit will on Tuesday hold an investor conference in Nairobi to sell the idea to potential investors who the State hopes to partner with to build 30,000-bed spaces in public universities that are struggling with a shortage of student accommodation.

“The conference is aimed at helping secure bids for the Sh20 billion development of additional hostels across three universities,” said the Treasury in a press statement on Monday, adding that the government intends to add 30,000 bed spaces through PPPs in three public universities.

According to the Treasury Cabinet secretary Henry Rotich, the institutions that will benefit from the project include Moi University, South Eastern Kenya University (Seku), and Embu University College.


Mr Rotich had earlier said that Moi would get an additional 14,000 beds, while Seku and Embu would get 5,400 and 4,000 new beds respectively; bringing the total number of new bed spaces to 23,400 – a figure that has now been raised to 30,000.

The project will be undertaken on a build-operate-transfer system in which universities will provide land for construction while the developers will build the hostels, operate them for about 20 years to recoup their investments before handing them over to the universities.

READ: New York firm to begin work on Sh5bn Kenyatta University hostel

The PPP model, which is becoming a popular trend globally, is viewed as a promising avenue for private investors to put money into the public education sector to supplementing State funding.

A fast rising population of university students in Kenya is creating enormous opportunity for developers to set up accommodation facilities across the country.

It is estimated that local universities have a combined 280,000 bed spaces against a student population of 769,500, which accounts for 40 per cent the country’s total housing shortage.

The shortfall has caught the eye of the real estate sector as a powerful alternative asset class giving rise to an increasing investor interest for the market segment.

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