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Student Housing Industry: India’s Emerging Asset Class

In addition to the traditional residential, commercial and hotel asset classes, consumer demand and consumption patterns are constantly changing, driving the development of new alternative asset classes that are emerging as the student housing industry in India.

The education sector in India is booming. Student accommodation is an obvious complement to the growing number of students enrolling in higher education each year. Since the total number of international students enrolled in India has increased significantly due to recent government initiatives, the demand for student accommodation has improved significantly.

Student accommodation has a high probability of regular and secure rentals, which makes sense for investors. With education being a key driver of India’s knowledge economy and a large youthful population, the government and the private sector have worked together to build great educational institutions through public-private partnerships (PPPs).

Student accommodation has the potential to become a well-established asset class, with stable rental income and significant growth potential. Students had to rely on hostels provided by their rented apartment institute to meet their housing needs. Institutional hostels are most often insufficiently equipped and rarely kept in good condition. The residential rental market was sometimes prohibitively expensive and landlords sometimes refused to accept students. In addition, the rented apartments were not serviced, leaving the students to manage them alone. However, the trend is changing and most students now prefer to live off campus and set up their own living spaces.

Students have housing options ranging from shared rooms to private rooms to entire apartments. In addition, the service providers offer a fully equipped and Wi-Fi enabled facility, as well as security services. Students have access to high-quality catering/canteen facilities, as well as other amenities such as a library, entertainment rooms, etc., in addition to basic living areas, which have been well received by students.

In contrast, student accommodation is a well-established business model in more organized and developed markets. There are accommodations to suit all budgets. The Indian market has identified this gap and the student housing market is booming.

Compared to other commercial rental assets, student accommodation offers a high return on investment, creating huge opportunities for organized market players. Moreover, as India gains ground as a world-class education and research center, student accommodation is expected to grow in popularity in the coming years. Student accommodation is unquestionably an emerging asset class in India to watch.

(The author is the co-founder of NestAway Technologies)