July 19, 2023: With the rising demand for quality accommodation, the student housing sector is emerging to be a sought-after asset class, according to a recent study conducted by Colliers India. Till recently, the sector was unorganised and unregulated even though thousands of students migrate to the metro cities each year to pursue higher education. The poor conditions of campus hostels and PG homes along with scaling rentals gave birth to the need for quality student housing across the country, especially in education hubs that have a high footfall of students each year, says the study.
The student relocation within the country currently stands at around 11 million. It is expected to touch 31 million by 2036, says the study. Further, there are only 7.5 million student beds at on-campus accommodations in pan-India, not enough to serve the current demand and far from being able to meet the projected future demand. There is immense potential for growth given this high demand-supply gap in the sector.
Swapnil Anil, executive director and head, advisory services at Colliers India, said, “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. A shared space with excellent amenities, same age-group community, convenience in commute and assistance in day-to-day activities – are the requirements of our young generation. 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”.
At present, there are a few players in the sector who have a growing presence in the country. Stanza Living currently has 70,000 beds across Dehradun, Vadodara, Indore, Coimbatore, Jaipur, Kota, Ahmedabad, Manipal, Kochi, Vadodara, Vidyanagar and Nagpur. Housr Co-Living has a presence in Gurgaon, Hyderabad, Pune, Bangalore and Visakhapatnam, with plans to expand in Delhi and Kota. Another operator, Your Space, has 5,500 beds across Delhi, Mumbai and Pune and aims at having a total of 20,000 beds by 2024 in prominent education hubs like Jaipur, Bangalore, Hyderabad, Chennai, Kota and Kolkata. Finally, Olive Living, managed by Embassy Group, has a stock of 2,500 beds and looks at adding another 20,000 over the next few years.
Post-pandemic, student housing rentals have been steadily rising by 10-15% YoY, reaffirming the scaling demand for quality student homes. With student enrollment in higher education projected to cross 92 million by 2036, there are untapped opportunities for investors and developers and tremendous scope for the sector’s growth. According to the report, it is likely that the market will see the emergence of new players and perhaps even global investors in the Purpose Built Student Accommodation (PBSA) market.
