A massive shortage of student housing at Zimbabwe's universities has presented a lucrative opportunity that investors are now racing to capitalize on. With demand far outpacing supply, both the government and private companies are making big bets on purpose-built student accommodation complexes across the country.
According to Roland Tatenda Ndowa, when he arrived at the National University of Science and Technology (NUST) in Bulawayo as a student, he realised how much his fellow students were struggling to find accommodation. He said parents and guardians were calling property owners from other cities and towns to try to arrange accommodation in a faraway place for their children.
These struggles sparked a business idea for Ndowa. He registered a company linking property owners and students seeking accommodation. The company went on to win a start-up pitching competition and has since evolved into a construction firm that the former NUST engineering student still runs a year after graduating.
Ndowa said he first developed a website with colleagues at the university while working on an accommodation app. He reported that a lot of people who were in real estate came asking to advertise their properties on the website and their properties were uploaded.
While Ndowa was linking students with property owners, the government and private investors started moving in to build accommodation blocks catering specifically to students. One such project has already been completed near Ndowa's former university in Bulawayo at a cost of $20 million.
The government-run Infrastructure Development Bank of Zimbabwe (IDBZ) spearheaded the project in a public-private partnership with Old Mutual, the Motoring Industry Pension Fund, Zimnat and the Catering Industry Pension Fund. According to reports, the Bulawayo complex will cater to all students at institutions of higher learning in the city that are within 3km of the hostels. This includes the Zimbabwe School of Mines, Bulawayo Polytechnic, and Hillside Teachers' College.
More Student Accommodation Projects in the Pipeline
The IDBZ is now looking to replicate the student housing project countrywide. Where it partners with private players, the complexes are built off-campus, while partnerships with universities have led to on-campus developments.
The IDBZ plans to build student hostels in six of the country's 10 provinces. The bank has already purchased land for some of the upcoming projects. In Masvingo, it has partnered with Great Zimbabwe University to build an accommodation complex estimated to cost $29 million.
According to the IDBZ, "The Great Zimbabwe Students and Staff Accommodation Complex involves a multi-storey complex and blocks of high-rise flats that will house 2,500 students, academic and medical staff in the city of Masvingo."
In the Midlands, the bank is collaborating with the Gweru city council on a project to construct multi-storey student halls and a shopping mall servicing 2,400 students. The estimated construction cost is $12 million for the student housing portion and $10.9 million for the commercial centre.
In Mashonaland West, the IDBZ is working with Chinhoyi University of Technology to build multi-storey hostel blocks housing 1,516 students on campus, with an estimated cost of $12.5 million.
In Matabeleland South, the IDBZ said it will not be entering a partnership since it already owns land to build the Lupane Student Accommodation Complex. This will include multi-storey hostels for 1,204 students and a shopping mall, with estimated costs of $12 million for student housing and $13 million for the commercial centre.
In Harare, the IDBZ is collaborating with the Catholic University of Zimbabwe to construct a multi-storey hostel accommodating 992 students on campus, at an estimated cost of $12.4 million.
Harsh Housing Conditions for Students
Muziwenkosi Sigidi-Moyo, the students' representative council president at NUST, told University World News that the Bulawayo Students City will help reduce accommodation challenges.
He said students were staying in really harsh conditions like unfinished rooms, maybe unpainted and untiled. One of the basic challenges was when property owners did not honour their end of the bargain, he added.
IDBZ Not the Only Investor Eyeing Student Housing
IDBZ is not the only one seeing big opportunities in purpose-built student digs. First Mutual Properties is also involved in a Chinhoyi student accommodation project, now at the second-floor level. The added advantage for First Mutual is that the development has prescribed asset status, which helps the company meet regulatory obligations while turning a profit.
First Mutual is also investing in student hostels in Zvishavane. According to its latest financials, the proposed designs have been approved by the Zvishavane Town Council. The report states: "The contractor commenced work on-site with Phase A comprising the Six Duplex Flats while the other 20 blocks of Double and Triple Storey Flats are at trenching and brick footing levels."
In 2018, ZimRe Properties invested $1.8 million to convert one of its Bulawayo properties, Nicoz House, into a student accommodation facility housing over 200 students.
Clearly, Zimbabwe's student housing challenge has also created a big opportunity for investment. Both private real estate companies and government lenders like IDBZ are rushing to fill the supply gap and build purpose-built accommodations catering to the country's growing student population. For investors hungry for new frontiers, student housing is offering attractive returns while also serving a clear social need.