Student Factory Africa Limited ventures into accommodation space
Student Factory Africa Limited is the latest entrant into Kenya’s budding student accommodation space which has only featured one notable player so far.
The firm which describes itself as a creator of youth centered living spaces is expected to break ground for its first built project in Nairobi’s Karen area next month.
“We want to create a paradigm shift on how student accommodation is offered in this market. We are providing quality, affordable and holistic living environment for students. We deliver more than just a bed and are building communities where students can thrive in safe environments,” the company’s Chief Executive Officer Christopher Osore told Citizen Digital in an interview on Friday.
Its pilot project which will see the firm deliver 4,500 beds in three phases is in partnership with the Kenya Conference of Catholic Bishops (KCCB) and sees it takes up space adjacent to the Catholic University of East Africa (CUEA).
Student Factory which estimates a 60,000 beds shortfall for students in tertiary institutions across Kenya is expected to leverage its partnership with KCCB to extend its portfolio to Kisumu, Tanzania and Uganda with a plan of hitting 10,000 beds in the next five years.
The strategic partnership nevertheless does not bar the company from collaborating with other higher learning institutions.
Student Factory Africa has received funding worth Ksh.5.5 billion ($50 million) for its debut project from its partners who include Dutch based concrete contractor Red Betonbouw B.V. and Tracom Services- a tech firm looking to divest into infrastructure.
Funding for the firm is split in a ratio of 70:30 to the favor of debt by Development Finance Institutions (DFIs) with the balance comprising of equity by the project’s partners.
The partners who largely cover a consortium of architects has a 20 year experience in projects around the world but is only now making its first baby steps into the student accommodation space.
The firm’s Chief Executive admits to difficulties in funding projects in the space that at present only prominently features Acorn Holdings- the proprietors of Qwetu Hostels in spite of the existence of needs to students’ accommodation.
“It has been a need expressed by universities. Investors have been struggling to get into the market. It boils down to having financial capacity to do this. The idea has been there but the challenge has been in structuring and designing a product that investors would be willing to invest in,” he added.
On its part, Acorn which so far features five complete student residencies around Capital Nairobi has relied on funding from DFIs partners to support its built projects but has similarly issued a green-bond to shore up funding.
Students Factory Africa will price accommodation in its Karen debut project at between Ksh.10,000 and Ksh.18,000 ($100-$180) per month.
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