Student housing segment catching the fancy of global funds, builders

BENGALURU: Institutional investors and builders are showing a lot of interest in India’s growing student housing segment as they look to tap the potential of this segment.

Global funds and local developers such as Warburg Pincus, Sequoia Capital, Goldman Sachs and Shearwater Ventures are either invested or has firmed up plans to invest in this space.

Student accommodation across India is expected to reach 13 million beds over the next five years from 8 million at present. Currently, the bulk of the student housing demand is serviced by the unorganised sector comprising rented accommodations and private hostels which often fall short of students’ expectations, said a recent Knight Frank report.

“The Indian student population base is growing consistently; this growth coupled with push from the government to promote more enrolment for higher education is a perfect recipe for the student accommodation market to flourish. The forecast is promising and is likely to offer investment opportunities in this alternate asset class for domestic and international investors,” said Shishir Baijal, chairman & managing director, Knight Frank India.


While about $100million has been invested into the Indian student housing market in 2018, Knight Frank estimates the current potential demand for student housing in the country to be approximately $50 billion.

“The demand-supply gap along with huge demand for shared accommodation has led to an increasing interest from investors to build and operate high quality alternative accommodation,” said Rajeev Bairathi, managing director, Shearwater Ventures. The firm plans to roll out 5,000 beds for student housing in north India over the next year under the MiNest brand.

“India has a large addressable rental population across students and young professionals which is expected to grow significantly as a result of rapid urbanization, increasingly unaffordable housing prices/rentals and shortage of oncampus housing infrastructure,” said Anish Saraf, managing director, Warburg Pincus, that has formed joint venture with Lemon Tree Hotels to set up rented accommodation for students and professionals.

India has the youngest population in the world, with approximately 18% of the 1.3 billion-strong population aged between 15 and 24 years. By 2020, the Indian government wants 30% of all in the age group of 18 to 23 years to be enrolled in higher education courses. This would increase the country’s student population to 40 million, a figure which is nearly double the current number of students studying in the US.


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