The aspiring generation driving growth of the student housing segment

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    Over the past decade, India’s education system has transformed immensely. This is further accentuated by the country’s technological advancements, giving rise to new ways to impart education. This has not only created new possibilities, but also unlocked fresh perspectives and aspirations for the student community. India’s emergence as a global power in terms of economic resilience, backed by a developed educational ecosystem has made the country a hub of talent and this finally translated into prosperity and growth of sectors, including real estate. The accelerated movement of students across the country, owing to rising prospects has not only generated demand for student accommodation, but also gave a boost to emerging asset class like student housing, thus creating a strong arena of opportunities.

    A report by a leading real estate consulting firm highlighted that student relocations in India currently number 11 million, and is projected to reach 31 million by 2036, opening up a significant opportunity for the student housing sector. It further states how the sector was unorganised and unregulated, despite thousands of students migrating to metro cities each year to pursue higher education and how poor conditions in campus hostels and PG homes, along with spiking rentals, stepped up the demand for quality student housing across the country, especially in education hubs with a high footfall of students each year. A similar demand survey was conducted targeting the millennials – the most prominent target group for the co-living segment, across top 7 cities like Bengaluru, Chennai, Hyderabad, Delhi NCR, Mumbai, Pune & Kolkata. The result revealed that by this year the total number of supply of beds by organized co-living players will increase to ~5,41,00 and 50% of this will be dominated by the Bengaluru & Delhi NCR markets cumulatively.

    This is a great opportunity for developers and builders who can now focus on this growing segment, not only to maximise value but also strengthen their footprint through diversification. As far as the market competition is concerned, there are few players who are operating in the student housing domain, especially in Tier-II cities like Dehradun, Vadodara, Indore, Coimbatore, Jaipur, Kota, etc. The big developers who have the advantage of capital inflows and robust investment ecosystem can totally leverage this to penetrate in these markets where the demand for quality student-housing and co-living are on the constant rise.

    Sources reveal that after the pandemic, the rentals of student housing have spiked by around 15% per cent year-on-year, clearly showing signs of surging demand in the segment. It is projected that enrolment of students in higher education will cross 92 million by 2036, and this is a great opportunity for developers to actively foray into the space.

    Apart from the demand driven by rising aspirations of students to make a mark in this competitive world, another key factor is the extensive urbanization of India. A study reveals that the rapid growth of cities has accelerated the growth of higher education institutions, such as universities and colleges, in urban areas. As a result, the demand for student accommodation in urban areas has increased significantly. Students are seeking accommodations that provide a superior standard of living, including modern amenities, safety, and amenities such as gymnasiums, communal areas, and study lounges. The prospect of steady rental income and a high occupancy rate has enticed considerable investment into the student accommodation industry by institutional investors and property developers.

    Thus, it can be rightly concluded that developers have a lot to offer to the new brand of demands and needs. While the overall real estate sector will continue to witness growth, student housing will eventually become popular, prompting developers to find ways to innovate, and there’s never been a better time to foray into this domain where opportunities are plentiful and the growth curve looks promising.

    Also read: Luxury Sales Share At 21% from 7% in 5 Years, Affordable Housing Down to 20% From 37%

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