The university has provided 20 acres at its main campus on Thika Road on which the investor will set up a hostel to accommodate 6,000 students.
The university is set to begin the search for the investor on Monday through an international tender, while construction is expected to start by June.
This will be the first public-private partnership venture by a local public university.
Kenyatta University is set to build a Sh1 billion housing complex for its students through a public-private partnership.
The university has provided 20 acres at its main campus on Thika Road on which the investor will set up a hostel to accommodate 6,000 students.
The university is set to begin the search for the investor on Monday through an international tender, while construction is expected to start by June.
It will be the first public-private partnership venture by a local public university.
The project will be on a build-operate-transfer (BOT) model where the investor will construct the hostel and collect rent for 15 to 20 years before handing the building back to the university.
“We have received Cabinet approval for the project and are going to tender on Monday,” said Kenyatta University vice-chancellor Olive Mugenda last week.
“Details will be worked out soon, but we have suggested that students be charged rent below the market rate,” said Prof Mugenda.
Rapid expansion of public universities has created huge demand for student accommodation amid inadequate supply of hostels.
University administrators say rising student enrolment has made it more attractive for private investors to set up hostels from which they stand to reap handsome returns.
Government statistics show that student enrolment in public universities stood at 157,916 last year, rising 62.6 per cent from 97,107 in 2007.
Kenyatta University, which had about 18,597 students last year, currently accommodates 10,000 students or 54 per cent of its total student population.
Maseno University, which provides accommodation for 40 per cent of its students, is also seeking to partner with private investors to boost supply of residential units at its main campus.
“We have a huge piece of land on which private investors can build hostels for our students,” Prof Dominic Makawiti, the vice chancellor, said.
“There are various ways in which we can engage with private developers, including a public-private partnership,” he said.
Administrators said the shift to the model is informed by the need to free themselves from non-academic concerns such as housing and catering and improve learning conditions for students.
The proposed hostel will feature one bedroom units for married students, mainly taking post-graduate studies. It will also feature single rooms, also known as studio apartments, which combine a living room, bedroom, and kitchenette in the same space.
This type of units will largely be taken up by undergraduate students, most of who are single and seek cheaper accommodation.
The International Finance Corporation, the private sector financing arm of the World Bank, is advising Kenyatta University on the project.
Inadequate housing at local universities has caused a steep rise in rents charged by private developers, a move that raises the overall cost of education for students. University administrators say private investors can work with the institutions to earn significant returns guaranteed by student demand for accommodation.
“There are good returns to be earned by investing in hostels for university students. Investors are not aware of the full range of opportunities,” Prof Makawiti said.
The government is rooting for such ventures to spur development in various sectors such as energy, roads, and healthcare.
“Major projects that are profitable will now be developed through PPPs,” said Mr Njeru Githae, the Finance minister.
Among the projects that have been cleared for PPPs are Olkaria geothermal development, and the Sh28bn second container terminal at Mombasa Port.
