Institutional investors and builders are becoming increasingly interested in the growing student housing segment in the country. They want to capitalize on the growth potential present in this segment. Global funds and local developers such as Warburg Pincus , Sequoia Capital , Goldman Sachs and ShearWatcher Ventures have invested or are preparing for this segment.
The current student accommodation in the country is about 8 million beds, which is expected to increase to 130 million beds in the next 5 years. A recent report by Knight Frank claimed that most of the student housing demand is currently meeting the unorganized sector, ranging from renting a house to private hostels. These usually do not meet the expectations of students.
Shishir Baijal, managing director and chairman of Knight Frank India, said, “The number of students in the country is steadily increasing. The government is also emphasizing on higher education, which is necessary for the flourishing of the student education market. There is a lot of potential in this segment. This can create an opportunity for domestic and foreign investors to invest in this alternative asset class. In 2018, the country’s student housing market invested around $ 100 million (about Rs 7 billion). Knight Frank has estimated the current potential demand for student housing in the country to be $ 50 billion.
Rajiv Bharti, managing director of Shearwater Ventures, said, “Due to the huge gap between demand and supply in this segment and demand for shared accommodation, investors have grown in interest in high quality alternative accommodation.” The company is going to offer around 5000 beds for student housing in North India under the Minest brand in the next one year.
Warburg managing director Aneesh Saraf said, “India has a large number of young students and young professionals hired. This is expected to increase further due to increasing urbanization, more availability of houses at affordable prices / rent and lack of on-campus housing infrastructure.
Warburg has formed a joint venture with Lemon Tree Hotels to develop rental accommodation for students and professionals. India is currently the country with the largest population of youth. About 18 percent of the country’s 1.3 billion population is aged between 15 and 24 years. The Government of India has set a target to enroll 30 percent of people in the age group of 18 to 23 years by 2020. This will increase the number of students in the country to 40 million, which will be almost double the number of students studying in America.
