Student accommodation in Nigeria – an opportunity for investors

Opportunities are opening-up for the private sector in the development and maintenance of student accommodation in Nigeria, says Lagos-based Alitheia Capital in a recent research note.

According to Alitheia, Nigeria has the biggest university system in sub-Saharan Africa with 114 accredited tertiary institutions. More than 50% of these facilities have over 20,000 students each.

Nigerian universities have experienced a significant rise in student enrolments over the past decades. However, the surge in students has not been matched by a corresponding growth in student accommodation. Figures from the National Universities Commission show that the provision of student housing is less than 30% of demand. The vast majority of students live in privately rented accommodation.

Alitheia says that the bulk of “first generation” universities in Nigeria have stopped funding student accommodation. Many of the newer universities have taken the private sector participation route, although the quality of accommodation varies widely.

“The student enrolment in tertiary institutions is growing at an average of 12% per annum and the provision of new purpose-built student housing is limited. This in itself creates opportunities for the development of student housing in many cities in Nigeria.”

Alitheia suggests that developers could partner with universities in build-operate-transfer arrangements on new accommodation.

There are also opportunities for better management of existing accommodation. “While the majority of institutions may be reluctant to give up control, the deteriorating condition of the majority of university-owned halls of residence indicates the need to manage these assets in a different way.”

Student accommodation should also have a strong focus on innovation and sustainability. “Developers need to be innovative in their approach to design, supplying functional accommodation, which incorporates the basic needs of students and provides additional facilities and services including laundry, internet services, relatively constant electricity, water supply, shuttle services, etc. The university community should be at the forefront of sustainability issues; this should be reflected in development and management.”

Alitheia added that in the future, the availability, quality and cost of student accommodation on offer will be a vital component for universities to lure good quality students.