Lagos State Government recently entered into an agreement with private developers via Public Private Partnership (PPP) to develop student hostel/housing at Lagos State University.
For real estate developers/investors looking for opportunities to explore in 2022, experts are of the opinion that provision of students’ accommodation in some of the nation’s universities remains their best bet.
There are no fewer than 170 universities in the country, out of which 79 are privately owned while 91 others belong to both the federal and state governments.
While owners of private universities provide for accommodation needs of students, that can’t be said of the public universities, especially those owned by states as students are left to fend for themselves.
In a few established public universities such as the University of Lagos, University of Ibadan and the rest where at least solid efforts are made to provide accommodation for students, the available facilities cannot go round, living a huge deficit due to the increasing students’ population being offered admissions yearly.
Despite the opportunities offered in this segment of the real estate sector, only few informal landlords are taken the advantage by converting their property to hostel accommodation.
In areas where new accommodation is being built, the supporting facilities are lacking due to paucity of funds and inadequate understanding of the investment.
It is on this background that the real estate developers/ investors are been urged to explore opportunities inherent in the provision of students accommodation in their decision this year.
According to them, such venture promises high returns on investment.
Speaking with the Nigerian Tribune in an interview, First Vice President, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr Johnbull Amayaevbo, pointed out that there was no part of the Nigerian cities that investors/developers would not reap their investments if they focus on student accommodation.
He noted that student accommodation has become a challenge for authorities.
According to him, many school authorities could not account for 15 to 20 per cent of accommodation requirements for their students.
For this reason, the estate surveyor and valuer urged developers/investors to take up the challenge and invest in executive students’ hostels, which according to him, has huge returns on investment.
“We know in Nigeria we have so many schools – higher institutions, and one of their major deficiencies is accommodation.
“Authorities in some of the institutions cannot account for 15 to 20 per cent of accommodation requirements for their students.
“Developer can invest in executive students’ hostel, which promises a huge return on investment,” he said.
Lagos- based estate surveyor and valuer, Richard Olodu, urged would-be investors in the real estate sector to invest in student housing, neighbourhood malls, serviced industrial facilities and warehouses.
On best ways to go about it, Olodu recalled that the Lagos State Government recently entered into an agreement with private developers via Public Private Partnership (PPP) to develop student hostel/housing at Lagos State University, Ojo.
Founder/CEO, Eximia, Mr Hakeem Oguniran, in his presentation on “Top Real Estate to Watch” has also identified students hostel accommodation as one of the “potential sweet spots’ where developers/investors could pitch their tent in 2022
Students’ harrowing experiences
Nigerian Tribune gathered that students in most of the universities have one or two things to say about their experiences.
Citing University of Lagos example, one of the students, who did not want his name in print, stated that due to the limited hostel accommodation available, most students resorted to squatting.
According to him, the process was done online and only accessible to students who have paid school fee. “In most cases, we see six to eight occupants, each occupant squatting someone else. Sometimes, it is usually a friend helping a friend or an occupant sharing bills with the original owner of the space.
He explained further that due to the difficulty in getting accommodation, most students who were lucky to get would sell to other students for unimaginable prices.
“Hostel fee is N15,000 but these students go as far as selling it for N80,000 to N90, 000 to fellow students that are desperate. Most times, when they buy, they look for a partner in order to foot the bill,” he alleged.
Ekiti State University, Ado Ekiti is a non-residential campus, where students have to search for their accommodation
Stating what is obtainable in the university, one of the fresh graduates, who identified himself simply as “Sunday” said that most students used to scamper for accommodation in nearby Iworoko neighbourhoods, while others would go as far as Fajuyi and Adebayo areas in the city’s centre.
According to him, an ordinary room cost between N60, 000 and N70, 000, while an executive room apartment cost between N80, 000 and N120, 000 per annum, depending on location and facilities.
Despite this arrangement, he said there was an acute shortage of student accommodation in the university.
Viability
Speaking with Nigerian Tribune recently, Lecturer in the Department of Urban and Regional Planning, University of Lagos, Professor Leke Oduwaye, said that coincidentally, he was involved with some, pointing out that the viability of such investment would depend on the location and the profile of the university or perception of the public about the rank of the university.
For many state universities, the professor explained that the majority of the students used to be indigenes with low capacity to pay high rent despite high demand.
According to him, these students sought for accommodation in mostly existing unoccupied buildings around towns. “So the major challenge is that for the investment to be profitable, it has to be a long-term investment, but due to high interest rate from banks which does not favour low/sluggish investment returns, it is a major problem.”
PPP initiative
In 2021, the Lagos State Government signed a Build, Operate and Transfer (BOT) agreement with six private property developers to deliver 8,272 units of hostel for Lagos State University (LASU) in the next 18 months.
Governor Babajide Sanwo-Olu officially approved the BOT agreement at a short ceremony held at Lagos House, Marina
The deal, which will lead to the construction of six blocks of Hall of Residence, was wrapped under the state Public Private Partnership (PPP) policy. The concessions will run for 35 years.
When the private developers deliver the projects in 2021, it is expected that 30 per cent of the schools’ 26,000 student-population will be served; thereby reducing the pressure resulting from over-subscribing of privately owned off-campus residences.
After signing the agreement, Sanwo-Olu said the development further underscored his administration’s objective of driving up quality output across the state-owned schools, through provision of infrastructure critical to facilitating better-quality teaching and learning.
Source : Zawya
