Authored by: Prasshra Kamra, Director at ASAP RealTech

(Prrashar, a second-generation realtor who has managed and overseen a quasi-real estate debt fund with an impressive value of nearly INR 2002 Crores. His financial expertise and real estate acumen have earned the trust of both NRI investors and developers. Prrashar is focused on transforming the Indian real estate sales landscape.)

 (ASAP RealTech is a leading 360-degree strategic partner for real estate developers in India, offering comprehensive services ranging from in-depth market intelligence and project configuration advisory to stressed project retrieval and robust sales expertise. With a remarkable track record spanning over three decades, ASAP RealTech has successfully delivered 100+ projects, generating a sales volume of over Rs.3200 crores.)

• In a recent study conducted by Colliers India, it has been projected that the student relocations in India, which currently stand at 11 million, have the potential to reach 31 million by 2036 and become a sought-after asset class
• With increasing preference for pursuing higher education, particularly in metropolitan cities, the student housing category has emerged as an attractive and untapped market for both investors and real estate players alike

Up until a few years ago, students across India have had to resort to accommodations provided by educational institutes or residences rented out by homeowners in the vicinity of colleges and universities. But with changing lifestyles, rising urbanization, higher household incomes, and aspirants’ quest for quality education, professional student housing rose to the fore and is now a widely prevalent segment of real estate, with signs of a positive future.

What is driving the Demand for Student Housing?

There are numerous factors contributing to this surge in demand. One of the foremost is the growth of the education industry in the country, which is attributable to the government’s focus on promoting education, coupled with favorable policies and initiatives targeted to improve the quality of education. This, in turn, has led to an increase in the number of educational institutions, both private and government, resulting in growing demand for student housing.  

Another reason for the increased demand for student housing is the absence of sufficient facilities on the campus, forcing students to live under conditions that are not habitable. Moreover, traditional hostels and PGs are disconnected from the actual needs of the student communities and do not provide the amenities they need. Thus, aspirants are resorting to student housing situated in close proximity to their colleges and universities, and equipped with facilities like food, Wi-Fi, air conditioning, electricity, 24×7 water supply, laundry, parking, security, and public transport.

A Promising Category

Looking at the potential for growth in the student housing segment and the existing demand-supply gap, especially in top metro cities like Mumbai, Delhi-NCR, Kolkata, Chennai, Bangalore, and Hyderabad, several developers are venturing into this category and helping improve the standard of student living. In fact, not just developers but investors, too, foresee tremendous potential for the industry’s growth.

If data is to be considered, the market currently houses a total of 7.5 million beds as opposed to the relocations that stand at 11 million. This significant gap of 3.5 million accommodations presents the perfect opportunity for new entrants and investors. Interestingly, the rentals of student housing, too, have witnessed an annual rise of 10 to 15 percent YoY, reaffirming the mounting demand. Not to forget, the student housing properties located in close proximity to colleges, schools, and universities, with easy access to public transport and other essentials, hold an excellent potential for property appreciation. 

If the trend continues, this new-found market will see the swift emergence of global investors, as well as new players, in prime markets like Mumbai and Delhi-NCR, where there is a constant influx of aspirants from across the country and the world. Overall, the long-term outlook for the student housing industry in India appears bullish. In fact, it could also become a key driver of the growth of the real estate sector in India.  

The Future of Student Accommodation

The ongoing decade is an exciting time for the student housing category in India. With greater emphasis on higher education, an increasing number of education institutes, steady migration of aspirants from smaller towns to urban localities, and a quest for a better lifestyle will continue to propel this industry forward. Through the right structural offerings, amenities, and location choices, the right players can grab the opportunity to capture this unexplored yet growing segment within the real estate sector!