Student housing is a buzzing space now

Chennai: Sensing the opportunity in student housing space, top 10 organised players are expected to add more than one lakh beds by next year. However, this will help meet just a miniscule portion of the demand.

Student housing generates a massive demand of more than 10 million beds across the major education-focused cities. Hostels and residential facilities in most educational institutes barely meet 18-20 per cent of the student housing demand. As the sector grows, tremendous opportunities will arise for various models of the student housing business--university tie-ups, independent housing, facilities management and staffing, finds Anarock Property Consultants.

Many start-ups have entered the fray; Oxford-caps, Tribestays, PLACIO, Stanza Living, Campus Student Communities, Housr and Simplyguest are currently operating in Delhi, Pune, Bengaluru, Noida, Mumbai, Indore, Dehradun, Ahmedabad and Jaipur.They collectively operate a little over 75,000 beds, with plans to touch nearly two lakh beds by 2020.

According to the Ministry of Human Resources and Develop-ment, India currently has over 36 million students pursuing higher education. This population is increasing every year and more than a third of it comprises migrant students who throng to educational hubs such as Pune, Bengaluru, Gurgaon, Mumbai, Noida, Nagpur and Kota, among others.

Anarock says student housing holds a host of opportunities for all stakeholders. For developers, it provides a fresh avenue of diversifying from the tepid Indian residential market. For investors, it is an emerging asset class with high potential for returns and low risk, and for educational institutions, it is a decisive value-add.

However, cost of construction and cost of land in bigger cities is a challenge and during the current liquidity crisis it will hamstring many developers. Private equity investments into student housing were as minimal as $60 million in the last two years.