Builders, investors chalk out plan to cash in on growing demand for student housing, ET RealEstate

July 21, 2023

The student housing sector is emerging to be a sought-after asset class amongst investors and builders, given the rising demand for quality student accommodation.

Many private investors and developers plan to expand into student housing facilities in India, with the existing operators like CUIB by JV Venture, Your Space, Stanza Living, and Olive by Embassy looking to double their capacity.

Separately, global funds like Brookfield Asset management UK-based Actis and Kepler Land are some of the large funds looking to enter this segment and have bid for Good Host Spaces.

“Our average building size has gone up from 40 to 45 students to now 150 students. So it’s becoming a lot more organized. We expect about a 90% occupancy across all our cities as this is the first full academic year post covid,” said Shubha Lal, Co-founder and COO, Your-Space, which has about 15,000 beds and 40 properties across 12 cities.

As per Colliers India, there are only 7.5 million student beds at on-campus accommodations pan-India, not enough to serve the current demand and far from meeting the projected future demand. Additionally, private operators have less than 100,000 beds to offer, with rental witnessing at least a 20% jump post the market pick-up. The student relocation within the country currently stands at 11 million and is expected to touch 31 million by 2036.

“There will be immense requirements for shared student accommodation in the coming years due to new education policies by the Government, innovative technologies, and the in-migration of students to pursue higher education. Pre-pandemic, many start-ups ventured into the purpose-built student accommodation sector, and very few have survived to become seasoned players with large portfolios across the country,” says Swapnil Anil, Executive Director & Head of Advisory Services at Colliers India.

Post-pandemic, student housing rentals have steadily risen by 10-15% YoY, reaffirming the scaling demand for quality student homes. Cappella, which has over 3,000 student housing targeted at the higher education segment in Bangalore, plans to roll out single-bed luxury student housing units-CUIB, across the country to cater to discerning consumers.

“The demand for high-end luxury student housing units is rising nationwide. Numerous Indian parents prefer enrolling their children in top-grade colleges within India rather than sending them to lower-ranking universities abroad, particularly for medical studies. This allows students to concentrate on their learning and studies without distractions or interruptions,” said Vishal Goel, co-founder of JV Venture, which invests in education infrastructure.

Stanza Living, India’s largest tech-enabled managed accommodation company, plans to continue to deepen the footprint of its existing hostel-style managed accommodation targeted at students and young working professionals. The company currently operates over 75,000 beds across 23 cities in India. Olive Living, managed by Embassy Group, is planning to add another 20,000 over the next few years from 2500 now.

According to industry experts, student enrollment in higher education is projected to cross 92 million by 2036, there are untapped opportunities for investors and developers and tremendous scope for the sector’s growth. The market will likely see the emergence of new players and perhaps even global investors in the Purpose Built Student Accommodation (PBSA) market.

  • Published On Jul 21, 2023 at 09:09 AM IST

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