Property developer Acorn is building two new hostels at the University of Nairobi (UoN) at a cost of Sh2.5 billion as it continues to expand its student accommodation portfolio.
Groundbreaking for the properties started on Thursday, with the institution expecting the venture to ease accommodation pressure for students.
The projects will be run by Acorn D-Reit, the unit which specialises in developing the hostels brands Qwetu which is the premium offering and Qejani for the mass market.
The project located at Chiromo campus is set for completion in the first quarter of next year. It will consist of 1,950 beds under the Qejani hostel brand while the Qwetu hostel will have 850 beds, bringing the total student accommodation capacity to 2,800.
“UoN is the first public university that we have partnered with this year,” said Edward Kirathe, the chief executive of Acorn Holdings.
“We will also partner with the Kenyatta University and JKUAT. Our partnerships will let them focus on their core mandate which is training and research.”
Monthly rent at Qejani hostels range between $75 (Sh8,500) and $125 (Sh14,000) while residents of Qwetu pay between $135 (Sh15,300) and $300 (Sh34,000).
UoN increased accommodation rates at its ageing hostels seven times for fresh students last year with a room shared by two scholars going for Sh19,635 per semester, up from Sh2,835 previously. UoN vice-chancellor Stephen Kiama said the hostels being built by Acorn will help attract foreign students.
“We have challenges in accommodating international students because our Kenyan students also want to get rooms,” Prof Kiama said.
“We have discussed that they also give priority to international students so that they can tell others of a good story of accommodation at University of Nairobi.”
Acorn will also build three new hostels at a cost of Sh3.6 billion targeting students in Hurlingham, Kenyatta University and Jomo Kenyatta University of Agriculture and Technology (JKUAT).
The Qwetu and Qejani hostels targeting students of Kenyatta University, for instance, will cost Sh1.9 billion and are expected to be completed in the first quarter of 2024.
The projects are part of Acorn’s plans to expand its portfolio of modern student accommodation near universities and colleges.
Demand for modern hostels is expected to rise in line with growing student populations and rising incomes.
Besides developing the properties, Acorn also holds them for income alongside other investors who bought into its real estate trusts.