The student housing segment is likely to attract investments of over $700 million by 2023 and the addition of 0.6 million beds in around the same period, according to a report.

The SAPFI-CBRE report titled, ‘The Herald of a New Chapter: Student Accommodation in India’, states that the sector is expected to witness 36 per cent growth between 2019-2023, with investments from Warburg Pincus, Sequoia Capital and Goldman Sachs.

It adds that maintaining affordabilityis one of the major challenges in student accommodation and the increase in competition is likely to affect the market price for assets, leading to an increase in the overall rent.

Another challenge for landlords and tenants is the undeveloped rental housing market in India, which remains mostly unorganised.

“Standardisation of the sector through minimum standard regulations and a separate definition as a distinguished asset class holds the key to unlocking the potential of the professionally managed student accommodation sector in the country," said Kaushal Mahan, Convener, Student Accommodation Providers of India (SAPFI).

The report states that only one hostel is available to six students enrolled in higher education, and this presents a great opportunity for investors.

With the government targeting a gross enrolment ratio (GER) of 30 per cent by 2020-21, the number of students enrolled for higher education would increase, it adds.

"With the GER of 30 per cent by 2020-2021, the segment provides huge potential for developers to tap into this opportunity and provide facilities in accordance with the changing needs of students," said Harish Nair, Executive Director (Consulting and Valuations), CBRE.

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