The student housing or co-living space is expected to witness an investment of around 700 million dollars and an addition of 0.6 million beds by 2023 across the country,
Despite student enrollment in India rising from 32.3 million in 2013-14 to 36.64 million in 2017-18, there are only a little over 6.5 million hostel beds.
The expansion plan announced by the top 15 student housing players is expected to result in addition of around 6 lakh beds in the next three to four years, the new report has said.
The Student Accommodation Providers Forum of India (SAPFI)-Commercial Real Estate (CBRE) report has also proposed that the scope of the draft model Tenancy Act should be extended to recognize and include ‘student accommodation’ as a residential sector as defined by the following definition ‘Quality residential accommodation that creates affordable, safe, healthy and comfortable environment for the exclusive use of students’.
No provisions have been specified for subletting of the property which could prove detrimental for emerging models in the student accommodation industry, says the report. SAPFI is an organization of student accommodation providers, managers and related service providers whereas CBRE is a global consultancy.
The report says that a need for student housing in India has been felt because, while the capacity of hostels has increased, it has continued to fall significantly short of the required mark. Moreover, universities have been too slow in adding to their hostel intake when compared to the growth in student numbers.
India is touted as one of the youngest nations in the world. by 2030, it will have nearly 140 million people in the college-going age group.
Hostels on campus cater to merely a small number of student population (and at most times inadequate facilities) and. therefore, the student housing sector is witnessing significant interest from operators and investors in this space, the report says.
The rising influx of migrant students in a few states has created a strong demand for student accommodation, and the campus facilities at educational institutions are unable to cater to this demand.
Larger states such as Uttar Pradesh, Gujarat, Maharashtra, Karnataka, Rajasthan, Madhya Pradesh, Tamil Nadu and Andhra Pradesh account for a major share in colleges across the country.
Most of these states have witnessed a steady pace of student enrolment in the last few years. Consequently, cities such as Bengaluru, Jaipur, Hyderabad, Pune, Nagpur and Mumbai housing prominent educational institutions have emerged as educational hubs, the report says.
As for models in the student housing space, some are based on sharing responsibilities between private owners and developers whereas in many instances housing needs are fulfilled by the developers alone.
The aggregator and the lease model are more commonplace in India, with the aggregator model functioning more like a marketplace for listing properties and thus allowing for a much quicker pace of expansion.
Other models that could gain traction include the university collaboration model. With the amplified need for student accommodation and entry of several organised players in India, collaborations among educational institutions and private players are already happening and expected to further pick up pace in India as well, the report says.
A build-own–operate–transfer (BOOT) model, wherein the capital and RE development would be done by the developer and the land and guarantee of students taking up accommodation would be provided by the university/college, is also expected to emerge. The facility could be then managed by a service provider or by the developer itself, the report says.
Globally, the increasing number of student housing REITs offers investors another way to gain exposure to this sector. As per Real Capital Analytics (RCA), the combined assets under management of student REITs globally total almost USD 4.9 billion, the report says.
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