The Nigerian education sector is facing a significant challenge of underfunding, which has led to inadequate infrastructure in public universities. With Nigeria being among the top nine countries in the world with a large youth population, the student housing market is a viable investment opportunity for developers and investors. However, the recent strike by the Academic Staff Union of Universities (ASUU) has posed a unique challenge to the sector. This article explores the impact of the ASUU strike on the student housing market in Nigeria.
Despite the underfunded state of public universities in Nigeria, the demand for higher education is continually increasing, resulting in a significant shortfall in student accommodation. According to the National Universities Commission, there is a housing deficit of about 1.9 million beds in Nigerian universities. This shortfall has created an investment opportunity for real estate investors and developers to bridge the gap by providing quality student accommodation.
The student housing sector in Nigeria presents a promising outlook, with projections of high university enrollment, constant and growing supply of new tenants, higher rents per square meter, property appreciation, and high occupancy rates. However, student housing developers and investors in Nigeria must navigate unique challenges that come with student housing in the Nigerian environment.
One of the most significant challenges is the recent ASUU strike that resulted in the closure of federal and state universities. The strike lasted for over eight months, and it affected the academic calendar, leading to a disruption in the rental income flow of student accommodation. This disruption has impacted developers and investors who have projected income based on the academic calendar. As a result, many developers and investors may have to introduce adaptive strategies to mitigate the risks associated with school closures, such as flexible tenancy that accommodates working millennials and young professionals.
Another challenge is the inadequate infrastructure and amenities in student accommodation. Most of the student accommodation available lacks basic amenities such as uninterrupted power supply, water supply, and security. This inadequacy in infrastructure and amenities has resulted in a low standard of living for students, which affects the marketability of the accommodation and the rental income.
Furthermore, most of the available student accommodation is concentrated in the urban areas, leaving students in the rural areas with no access to quality student accommodation. The concentration of student accommodation in urban areas has resulted in a high demand for student housing, which has pushed rental prices beyond the reach of most students. This has also created an opportunity for developers and investors to provide quality and affordable student accommodation in rural areas.
The student housing market in Nigeria is an emerging asset class expected to thrive in the Nigerian real estate market. The demand for higher education and the growing youth population make the student housing market a viable investment opportunity. However, developers and investors must navigate the unique challenges associated with student housing in the Nigerian environment, including the recent ASUU strike, inadequate infrastructure and amenities, and concentration of student accommodation in urban areas.
In conclusion, the ASUU strike has posed a significant challenge to the student housing market in Nigeria. However, developers and investors can mitigate the risks associated with school closures by introducing adaptive strategies such as flexible tenancy. The student housing market presents a viable investment opportunity in Nigeria, and developers and investors can bridge the gap in the inadequate student accommodation by providing quality and affordable accommodation.