Unlocking the opportunity: Prospects for student accommodation

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Is the development of student accommodation an attractive investment option for real estate investors in Zimbabwe's private and public sector? Despite the economic challenges currently faced by the country, the prospects for growth in student real estate are real and growing.

Although student housing is not a traditional asset class for real estate investments in Zimbabwe, the demand for student accommodation today significantly surpasses current infrastructure and service capacity. This is one area where the real estate sector could see significantly increased economic activity and growth.

The opportunity

There are currently 18 universities in Zimbabwe1 and almost every province has one. The number is steadily growing, removing geographical distance as a significant deterrent to the uptake of tertiary education. Universities are far more accessible to potential students and this accessibility has led to rapid growth in enrolment. At the same time, the Infrastructure Development Bank of Zimbabwe (IDBZ) has estimated that 75% of the current student population in Zimbabwe has no access to on-campus accommodation facilities.2

This imbalance between demand and supply provides a highly promising gap in the real estate sector.

A breath of fresh air for the sector

Property investments in Zimbabwe are prominent in both commercial and residential properties. Due to the prevailing economic climate including high inflation, however, the property market in general is experiencing an excessive supply of space allied with a lack of high-quality assets and development activity to meet demand. These issues have led to a wide housing gap, high rentals and low commercial investments.

At the same time, social trends and globalization have led to a cultural shift in student lifestyles. The needs of millennials are strikingly different from those of past generations. Today, students are looking to amplify their housing experience with modernized facilities and high-quality services that include social spaces, entertainment, recreation and fitness amongst many other activities. As an investment class, student accommodation can be an attractive choice for numerous reasons.


"Although student housing is not a traditional asset class for real estate investments in Zimbabwe, the demand for student accommodation today significantly surpasses current infrastructure and service capacity."


Firstly, student accommodation today takes a variety of forms. In the past, students only had a few options: on-campus housing, renting an apartment in a nearby town, or living with family and commuting to their studies.3 With today's dynamic student population and their specific demands, products have evolved to include the provision of modernized housing on a small scale and, more popularly, the use of multifamily residential property as an off-campus dorm with modern amenities.4

Second, global investors in student accommodation have highlighted that during economic downturns, demand for student housing tends to increase. This is due to students prolonging their studies whilst they wait for job markets to improve. It has therefore been concluded by market players that student accommodation is a recession-proof activity.5 This makes it a viable investment option for real estate players in Zimbabwe's current economic environment.


"Student accommodation in Zimbabwe is positively supported by tertiary institutions and promises consistent yields."


Public-Private Partnerships (PPPs)

The land in and surrounding universities and colleges in Zimbabwe is mostly owned by governmental entities. This provides a strong platform for infrastructure development through Public-Private Partnerships (PPPs) in terms of the Joint Venture Act [Chapter 22:22].

The current PPP framework could enable real estate developers to inject technology and capital into joint ventures with the government of Zimbabwe, who will provide the necessary infrastructure. If implemented correctly, PPPs in the real estate sector have the potential to play a pivotal role in infrastructure development. PPP structures can provide private investors with the necessary mechanics to engage in development projects for university and colleges that enable students to access modern living spaces in close proximity to their campuses – which is a convenient and desirable option for students. Our observations suggest that most students rent small rooms located in surrounding residential areas, an option that is often more costly and less attractive to the general student population.

Development in action: Promising consistent yields

Various players have already shown interest in developing new infrastructure for student accommodation for tertiary students. This includes numerous banking institutions such as the IDBZ as well as property developers. For example, Zimre Property Investments recently completed an off-campus development for tertiary students in Bulawayo. As the first major student housing development in the market, this development is now considered the biggest student accommodation facility in the city, and is accessible to several tertiary education centers. Zimre says this development has shown that student accommodation in Zimbabwe is positively supported by tertiary institutions and promises consistent yields.

Our ever-growing student population and its demands for high-quality accommodation present a lucrative investment opportunity. With university and college land primarily owned by the state, infrastructure developments can be achieved through PPPs and ideally evolve into mainstream investment opportunities that could attract global investors. The market for student accommodation is in need of further capital injection from private and public investors, with the high demand and low supply clear indications this market is ready to be unlocked.

Manokore Attorneys is a member of DLA Piper Africa, a Swiss verein whose members are comprised of independent law firms in Africa working with DLA Piper.


1 https://www.4icu.org/zw/a-z/
2 https://www.idbz.co.zw/project-operations/idbz-projects/university-students-staff-accommodation-project-ussap
3 The student housing sector is hotter than ever – here's what you should know – https://www.buildium.com/blog/investing-in-student-housing/
4 The outlook for student housing investment – https://www.savills.com/research_articles/255800/281001-0/the-outlook-for-student-housing-investment
5 Student Housing is the Recession-Resistant Investment Play – http://hsprealestategroup.com/2019/02/24/student-housing-is-the-recession-resistant-investment-play/
6 Zimre Property completes Byo students' accommodation project – https://www.chronicle.co.zw/zimre-property-completes-byo-students-accommodation-project/