Safaricom sacco to invest Sh50m in bid to ease hostel shortage

President Uhuru Kenyatta and First Lady Margaret Kenyatta are received by senior South African Government officials and the Acting High Commissioner Helen Gichuhi (left) on arrival at Cape Town International Airport, South Africa May 9, 2013. President Kenyatta is in Cape Town to attend the World Economic Forum on Africa. PPS


By Neville Otuki

 

 

In Summary

• The cooperative has reserved Sh50 million seed capital to construct hostels on a 10-acre land targeting KCA University students in Kitengela.

Safaricom Investment Cooperative (SIC) is set to provide decent accommodation facilities to university students as it seeks to diversify its investment options.

The cooperative has reserved Sh50 million seed capital to construct hostels on a 10-acre land targeting KCA University students in Kitengela.

Speaking Thursday during the unveiling of the society’s first housing project – Blue Bells Garden – the board chairperson Mackrine Abukah said the society sought to tap into increased number of students seeking accommodation around universities.

“We are exploring two options – public-private arrangements and going alone,” Ms Abukah told the Business Daily on the sidelines, adding that the board is currently in talks with a number of universities.

The society, comprising of 1,400 members, will buy land around certain universities and put up accommodation structures.

Under public-private partnership, the society will adopt a build-operate-transfer (BOT) model where the investor constructs the hostel and collects rent for a given time depending on project capitalisation before handing the building back to the university.

This comes amid rapid expansion of public universities currently standing at 22 which has piled pressure on the existing accommodation units.

In total, there are 48 universities in Kenya – 22 public (government funded), 14 chartered private universities and 12 with Letter of Interim Authority.

University administrators say rising student enrolment has made it more attractive for private investors to set up hostels from which they stand to reap handsome returns.

Meanwhile, Cooperative Development Secretary Nelson Githinji urged other saccos to emulate Safaricom and initiate housing projects directed at tackling accommodation problems, especially at county level.

“It is envisaged that the cooperative sector will provide a quarter of the national target of 150,000 housing units per year according to 2030 Blueprint,” he said.

Safaricom Investment Cooperative also plans to undertake value addition for agricultural produce and facilitate Kenyans in the diaspora to invest in the country’s real estate sector