Student housing industry: India’s emerging asset class

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

The education sector in India is rapidly expanding. Student housing is an obvious complement to the growing number of students enrolling in higher education each year. Since the overall number of international students enrolled in India increased by a great share due to recent government initiatives, the demand for student housing has significantly been improved.

Student housing has a high likelihood of consistent and secure rentals, which makes sense for investors. With education being a key driver of the Indian knowledge economy and a large young population, the government and private sector have worked together to build large educational institutions through public-private partnerships (PPP).

Student housing has the potential to become a well-established asset class, with steady rental income and significant growth potential. Students had to rely on hostels provided by their institute rented apartment to meet their housing requirements. The institutions’ hostels were more often inadequately equipped and rarely kept in good condition. The residential rental market was sometimes prohibitively expensive, and landlords in some cases refused to accept students. Furthermore, the rented apartments were not serviced, leaving the students to manage them on their own. However, the trend is shifting, and most students now prefer to live off-campus and arrange their own living spaces.

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

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

When compared to other commercial rental assets, student housing offers a high return on investment, creating enormous opportunities for organised market players. Furthermore, as India gains traction as a world-class educational and research hub, student housing is expected to gain more traction in the coming years. Student housing is unquestionably an emerging asset class in India to keep an eye on.

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