Higher education a $100-billion real estate opportunity as universities may adopt asset-light strategy, says report

Higher education emerges as a $100 billion institutional real estate opportunity

• India to invest $100 billion in higher-education infrastructure
• Universities lease campuses, turning them into institutional real estate assets.
• Foreign universities expand in India, increasing demand for specialized academic spaces

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India’s higher-education sector is emerging as one of the country’s largest new institutional real estate opportunities, with developers and landowners expected to deploy nearly $100 billion in academic infrastructure over the next decade, an Anarock Capital report has said.

The scale of expansion is likely to position India as the largest higher-education infrastructure build-out market globally, experts say.

According to data from Anarock Capital, the National Education Policy (NEP) 2020 targets a 50 percent Gross Enrolment Ratio (GER) by 2035, implying the creation of around 25 million additional seats, which would require large-scale campus development and modern academic facilities.

Meeting this target would require the development of 2.7 billion square feet of academic infrastructure across approximately 30,000 acre, with an estimated $100 billion investment in academic facilities alone, excluding land acquisition and student accommodation infrastructure, Anarock Capital CEO Shobhit Agarwal said.

Anarock Capital data, released on February 6, shows that the demand for academic space is being underpinned by a sharp expansion in India’s education pipeline. At the institutional level, the number of universities has risen from 760 in 2015 to 1,338 in 2025, while total higher education institutions have expanded to over 70,000.

Capital burden shifting to developers from universities

Market observers say the capital burden of this expansion is shifting away from universities to real estate developers and institutional asset owners, as many new entrants, particularly private and foreign universities, adopt asset-light leasing models instead of developing owned campuses.

“Several new institutions are likely to lease space in existing or purpose-built academic buildings before committing to owned campuses. While this reduces upfront capital expenditure for universities, it transfers the investment responsibility to landlords and developers, who will create and own the physical infrastructure,” said Aashiesh Agarwaal, SVP – Investment Advisory, Aanrock Capital.

Transition is expected to drive demand for institutional-grade, purpose-built academic real estate, with long-term lease tenures and stable occupancies, experts say.

Foreign universities add to institutional demand

The Foreign Higher Educational Institutions (FHEI) Regulations, 2023, allow overseas universities to establish branch campuses in India.

Three foreign universities — Australia's Southampton, Wollongong and Deakin — are already operational. Thirteen more, including Lancaster, Liverpool, Illinois Institute of Technology and Istituto Europeo di Design, have announced India plans, signalling rising global confidence in the domestic education market, Anarock Capital data shows.

Several state governments are aligning policy and real estate strategies to attract academic investments. Uttar Pradesh has introduced stamp duty exemptions and capital subsidies for higher education institutions, while GIFT City in Gujarat has launched a dedicated international campus framework with shared academic infrastructure.

Maharashtra is developing a 250-acre "Educity" near the Navi Mumbai International Airport, which has secured commitments from five foreign universities.

Education campuses emerge as a new institutional asset class

With universities prioritising leasing over ownership, campuses are increasingly being viewed as long-duration, policy-backed real estate assets offering predictable cash flows and low volatility, say analysts.

For developers, real estate investment trusts (REITs) and long-term capital providers, education-led real estate is now emerging as a distinct institutional asset class, opening a new growth corridor beyond offices, logistics and data centres.