Jul 2019 , by , in Latest News

Fresh and wholesome suppers, Wi-Fi, housekeeping and laundry services, app-enabled living in an airconditioned environment. Welcome to the world of purpose-built student accommodation.


The huge demand-supply mismatch is reason enough for developers to earn high rental yields – projected to be anywhere between 14-17%, which are much higher than established asset classes like residential and commercial real estate.

An alternative to hostels and paying guest (PG) accommodations, the organized student housing segment offers an environment and services that align with the needs of today’s students. From around 20 Universities and 500 colleges post-Independence, the higher education sector in India has grown to 903 Universities, 39,050 Colleges and 10,011 standalone institutions in 2018. Total enrolment in higher education is estimated to be over 36 million, with over 46,000 foreign students.

Aashish Agarwal, Senior Director, Valuation & Advisory Services at Colliers International India pointing on soaring numbers in higher education sector in India explained, “As per Census 2011, around 8 million people migrated for education and the number is currently estimated to exceed 10 million. The housing need of these students are partly catered to by college hostels, but majority of these students have to rely on unorganised shared accommodations. In almost all cases, these facilities have serious service gaps, safety and hygiene issues, opaque pricing as well as lack of proper food and transport. The student housing sector is trying to address this unorganized market by offering quality accommodation with the required services, using technology as an enabler.”

B K Malagi , COO Experion Developers stating about the growing need of student housing agreed, “About 60 -70 per cent of the demand for hostels is currently being serviced largely by unorganised players comprising PGs, individual landlords, residential apartments etc. These are not equipped with services/ facilities required by students like housekeeping, food, laundry etc. This has created a space for professional student housing players which can provide “Purpose Built” student accommodations.”


While there aren’t specialized companies in the country offering these services, and it’s definitely the way forward. Only 20% of the current demand is met by universityoperated supply, as per research reports. Finding suitable accommodation is one of the biggest challenges faced by the migrant students that are often forced to settle for hostels or PGs that are economically viable but lack basic amenities.

Pratul Gupta Co-Founder at Grexter Living added, “If we go by the statistics provided by property consultant Knight Frank, over 34 million students are currently enrolled in different courses at universities across India, but there are only 1.6 million PBSA bed spaces available. This supplydemand gap is driving the growth of India’s purpose-built student accommodation (PBSA). In 2018 alone, it managed to pull investments worth $100 million. India’s student housing has the potential to attract $50-billion private investment. The number indicates how this sector is steadily gaining traction in the country.”

Rohit Kapoor, CEO, New Real Estate Business, OYO expressed that the government’s push on reforming education to make it globally competitive while also launching a ‘Study in India’ program to attract foreign students will not only boost the sharing economy but also necessitate a change tech driven approach to student housing.

The current student intake across 44,000 hostels in India is over 6.5 million with around 60% occupancy. With an estimated gap of around 4-5 million beds and based on the targeted growth, the student housing sector’s demand in India is projected to be 8-9 million beds by 2025. With a combination of oncampus and off-campus models, both Indian and global operators are aggressively pursuing this opportunity, which offers stability and certainty of demand, growing middle-class population with propensity to spend, demand for quality services from a technology-native Gen Z population and ability to upsell products and services.


This market is still unorganized and sees constrained participation from stakeholders such as the universities, which stay hesitant to collaborate with student housing operators. B K Malagi elaborating about many challenges facing student housing said, “Currently, there is no formal policy and regulations for student housing in India. Very few cities have defined student housing regulations with regards to zoning, FAR and other development norms. Along with safety and security, the important concern of both students and parents, quality of food is a major concern. There are very limited customized offering/solutions for students. Personal touch missing in this sector.”

Aashish Agarwal added “The operational challenges of aggregating residential premises close to the campus is one of the key challenges of the sector. With most operators pursuing an asset-light model, the scale of purpose-built student housing in India is still very low. In a city like Bangalore which has around 893 colleges, demand-supply mismatches leads to unaffordability of quality spaces. Tie-ups with universities is also an essential element for operators to secure funding and scale up operations and inventory, but this is still unstructured territory. There is a need for more institutionalized effort to pursue PPP and BOOT models, as well as create an enabling framework for the sector through measures like the Model Tenancy Act. “


As residential and commercial investment space seems to be getting saturated and offer limited returns, HNI’s and private equity investors and large asset purchasers are targeting this investment asset class. It is a stable rent yielding asset. Has potential to scale at a pan India level – metro, and other tier II & III cities.

“The education ecosystem is rapidly growing in the country and student housing is getting recognized as a favorable asset class. Government’s initiative towards making country – the education hub of South East Asia, will further boost the segment. Currently education institutes are able to meet only about 20% of the student housing demand. This segment is undersupplied and offers a huge opportunity for the organized players to cater to the growing demand,” said Vineet Goyal, Founder, Youthville Serviced Hostel.

The industry experts view the nature of student housing business similar to hospitality segment though cash flows are more captive with higher demand and occupancy and reasonable insulation from seasonal business cycles. Student housing also offers much higher returns than conventional residential yield. Given the demand-supply mismatch at this point, operators with quality offerings and inventory are able to command significant margins and negligible cash-burn, which is a welcome addition to the investors’ portfolio.


In the past, it was common for students and working professionals to either opt for hostels or rented apartments when they moved to a new city. Today, the scenario has changed to a great extent, with new companies offering affordable yet quality housing solutions to these student migrants.

Placio with presence in Delhi, Noida, Greater Noida, Lucknow and Indore, works closely with the universities, understanding the requirement, channelize the demand and helping in the value addition for the property owners. “We provide purpose built student housing offering single room, double or triple sharing rooms in three categories – Placio Prime, Placio Luxury and Placio Dorm. Placio properties are responsible for marketing & branding, system implementation, providing property management tool, managing their operation more efficiently, training of staff, providing a dedicated community manager who is responsible for managing 150-200 students in the property.”

Youthville Serviced Hostels by Pune based realty developer Kohinoor Group offers triple and twin sharing accommodations in Pune. The company also provides high speed Wi-Fi, Laundromat, fitness center, cafeteria, music room, library, mini theatre, common kitchenette, doctor on call and housekeeping facility plus provision for bike on hire. Students pay for their food and transport. By 2023- 24 we are aiming to have 25,000 beds pan-India.”

Oyo Hotels & Homes is also entering the lucrative student housing market through its long-term rental and managed residential business, Oyo Life. According to Rohit Kapoor, Oyo Life will be targeting over 100,000 beds in the top 10 Indian metro cities by the end of the current calendar year.

Stanza Living, which provides accommodation facilities to students in Delhi, Noida and Bengaluru has forayed into Hyderabad, Chennai, Coimbatore, Indore, Baroda, Pune and Dehradun. With this, the company has reached a national inventory of 22,000 beds across 10 cities.

Oxfordcaps.com, a student housing portal has grown its operations across education hubs in India including Delhi, Bengaluru, Mumbai, Pune, Greater Noida, Dehradun, Indore, Jaipur, and Ahmedabad, among others.

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