An Investment Analysis of Private Student Hostel in Nigeria Tertiary Institutions: A Case of FUTA Campus

摘要

The expanding number of students in tertiary institutions in most Nigerian cities has prompted serious accommodation problems and on-campus hostels can no longer cope with the attendant demand. The establishment of private hostels, though very useful, requires huge capital for investment; hence investors need to have a fair idea of the likely return before committing their resource. Using the Federal University of Technology Akure, (FUTA) Nigeria as a case study, this study examines the effect of increase in on-campus hostel accommodation on the viability of off-campus private student hostel with a view to advice investors on their returns. Data for this study were elicited from FUTA students who are resident off campus, using a structured questionnaire. Out of 389 randomly distributed questionnaires, 374 (96.1%) were retrieved and found useful for analysis. Findings arising from sensitivity analysis indicated that a decrease of 35 percent in the demand for a room self-contain at a discounting factor of 25 percent shows that the project is not viable. The study identifies that investment in student hostel off-campus is very sensitive to student demand even at eight (8) percent reduction. It is recommended that investors should consider the option of investing on-campus rather than off-campus; a means towards this is Public Private Partnership.