Student housing: Nigeria leads peers in campus bed space demand gap

Nigeria, Africa’s largest economy, is several steps ahead of its peers in the campus bed space demand gap, as reflected in the gap between what is available and what is needed.

The country currently requires about two million bed spaces across its various universities, colleges, and polytechnics. Of this number, only 300,000 bed spaces are available, according to a recent report by Fortren and Company.

This leaves a demand gap, amounting to 1,700,000 bed spaces, representing a huge investment opportunity whose value runs into billions of naira. Though this number is a reflection of the high student population in the country, it contrasts sharply with what obtains in other African countries.

In South Africa, for instance, there are about one million bed spaces with 250,000 available and a 750,000 demand gap. Kenya has 470,000 bed space available and 430,000 bed space gap, while Ghana has 280,000 bed space available and 320,000 gap.

All these put together show existing stock and demand gap in purpose built student accommodation (PBSA) across Africa, and make a strong investment case for that segment of the market.

“The investment case for African PBSA begins with a supply gap that is both quantified and widening. Student housing stock across the continent currently meets less than 30 percent of demand. Against that gap, Africa has1,331 officially recognised higher institutions with a gross enrolment ratio (GER) of 9 percent, compared to a global average of 42 percent,” Martin Uche, Research Director at Fortren and Company, affirmed.

GER measures total enrolment in higher education as a percentage of the official age group population. Uche noted that with over 60 percent of Africa’s 1.4 billion people under the age of 25, any upward movement in enrolment rates will translate into housing demand at a scale existing infrastructure cannot absorb.

This demand is real and operational data confirms it. In the same vein, operators, including Acorn Holdings, Eris, and Student Accommod8, have consistently reported strong occupancy. Acorn recorded 93 percent average occupancy in H1 2025, a figure that reflects a demand base that is demographically guaranteed rather than cyclically dependent.

Abayomi Onasanya, founder/CEO of Student Accommod8, told BusinessDay in an interview that investment in student housing gives about 22 percent returns, which is more than double what commercial real estate gives, not to mention residential real estate where the yield is about 4-5 percent.

Rotimi Akindipe, MD/CEO of Groveworld Realties, affirmed this, adding, “hostels for students are an opportunity that is crying for investment, and if a developer has an understanding with an institution, it is a worthwhile investment.”

Onasanya encourages more investors to come into the space, noting that the few developers who have ventured into the sector have seen incredible occupancy rates of up to 90 percent within six months of completion.

However, investors are not embracing these opportunities in the number that is expected, hence reinforcing the supply-demand gap that exists.

Findings by Estate Intel reveal that investors have their reasons for holding back investment in this sector. One of such reasons is the difficulty in structuring financing with schools.

Dolapo Omidire, Founder.CEO, Estate Intel, explained in a report that “educational institutions that lease land to developers create terms of agreements that are onerous and difficult to finance.”

Another challenge is that developers are sceptical about the paying potential of the students. For this reason, many developers put the more traditional sectors on the front burner.

“We understand that students are price-sensitive, but our data shows that good products still sell and students are willing to pay a premium for amenities. The data that we track shows that rents for student housing in Yaba, Lagos have grown considerably over the past few years,” Omidire explained further.