The mobility of students in India is increasing, and it is common to see students moving to different cities, for higher education. However, there remains a shortage of good hostels and other facilities, to accommodate this migrating population. Consequently, student housing is slowly gaining importance as a real estate asset class. The PG market in India is not organized, with any uniform standard in place. Scholars are searching for places to stay, without having to get into the hassle of renting an apartment. Hence, there is a high demand for co-operating living spaces and student housing, unlike before.
Investors are currently looking at student housing as the next significant trend in India while student housing co-living areas are already substantial segments in the real estate markets in America and Europe.
Points out that in cities, such as Pune, Mumbai, and Delhi, students preferably share flats with two to four people. Mumbai, Pune, and Delhi cities are among the most expensive, in terms of cost of living and real estate while these cities have world-class education options for students, adding that the customers in the student housing segment change in a duration of three to five years, with most of them, either moving back to their hometowns or another city altogether.
In cities, such as Pune, Bengaluru, Mumbai, et-cetra, to cash-in on the significant demand from students, plethora developers are introducing affordable housing options, near the colleges and universities. This is a motivating factor for investors to purchase flats and rent it out to the scholars. People are, additionally, designing their properties as co-living accommodations, by the facilities that students need, like security, space, and a conducive study environment. These flats are fully-functional and near to universities. The real estate market is bending tremendously toward student housing. Specially architected co-living apartments for students are new in the Indian market, and with a continuously increasing population of students enrolling for higher education, people are diving into this newfound real estate opportunity.
Investors can design and rent out available spaces for students, with minimum input and earn delightful returns.
Student housing is likely to be concentrated in tier-II cities and a few metro cities. It is unlikely to gain prominence in the metro cities, given the high prices of land.
Student housing will be a localised phenomenon, in the areas and macro-market where universities are located. It is an emerging asset class in the real estate industry that will remain small, for the next four to five years. At this juncture, about 65-70 per cent of the student housing segment is catered to by unorganised players and only a miniscule five to 10 per cent by organised players. Gradually, the unorganised players will give way to organised third-party players. Globally, the trend is that the universities focus on academics and allow third-party service providers to manage student housing. A similar trend will soon pick up in India in the next few years.