Student Housing Emerging As The Flavour Of The Season

Higher enrollment numbers have pushed demand for student housing in the country. Approximately 26.6 mn students out of 34 mn students in higher education in India move to cities such as Bengaluru, Chennai and Pune creating demand for accommodation. This makes student housing a new investment class for developers.

Favourable demand-supply scenario

The favourable demand-supply scenario spurs demand for student housing in Indian context as well as at the global level. In the US and the UK markets, this sector has already been a great success because of the attractive market size. At global level, this sector has attracted around 200 billion dollars of investment. Even student housing in London gained importance because of the higher yield rate which is 4.5 per cent as compared to the commercial yield rate of 3 per cent.

A similar story is iterated by the Indian real estate market that also has immense potential for the student housing. Cities such as Pune, Bengaluru and Chennai have seen high annual student enrollments. There is an estimate that Pune and Bengaluru can accommodate around 18 to 20 per cent of the inward migrating students.

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Reason for the increased demand for student housing

The main reason backing this demand is high enrollment rate and lack of supply when it comes to hostels. The skyrocketing prices of PG's and the harassment students face by the private accommodation owners creates demand for student housing. This creates immense scope for developers and investors meeting the demand for student housing in the country. 

Scope of student housing

The prime educational hubs in India include Chennai, Pune, Delhi NCR, Mumbai Metropolitan Region, Hyderabad, Nagpur, Kota, Jaipur and Kolkata. Amongst these locations, Chennai, Pune, and NCR saw the maximum increase in demand for student housing. These regions have seen coming up of large number of higher education institutions. This along with a large number of outstation students coming in the cities have pushed the demand for student accommodation in this region. Kota, the famous coaching destination for medical and engineering students has limited scope because a large number of outstation students drop out before the completion of the course. On the other hand, Mumbai is lagging behind because of high cost of living and limited options for student housing.  

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