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Future Trends in Student Housing by Venayak Gupta, your-space | ||
Mumbai, Maharashtra, India Students in India had to seek accommodations operated by educational institutes or spaces rented out by home owners in the vicinity of their colleges/universities. The student housing industry that predominantly constituted unorganized players is seeing a formidable change with professional student housing solution providers now operating in multiple cities and aspiring for a Pan-India presence for their brands. Pan-India operators can create national brands that allow them to attract students from multiple demand centers.
Venayak Saran Gupta
In PGs and hostels, mundane weekly menus with aloo paranthas served to students all week whereas professional operators curate menus that are more appealing for them. Previously demand generation was entirely offline and word of mouth based, this is also seeing a major shift with Gen-Z looking to book their hostels directly by looking for options online.
Before the rise of prevalent student housing startups and alternative asset classes in the student housing real estate, the mom-and-pop operators had an average of 10-15 rooms. Student housing operators are deepening their presence in cities through strategic, built to suite buildings which are upwards of 50 rooms. This allows them to provide better common facilities like gyms, study lounges, hangout zones to their residents.
The last two years through COVID have been especially tough for the erstwhile owner-operators which has meant they’re more amenable to going for a leasing model with a consistent ROI for their property. This is also the case with hotel owners finding a leasing model backed up by the predictable demand of students more suitable than a revenue sharing model with hotel aggregators like Oyo, Fab, Treebo, etc. who were forced to relinquish properties in key markets amidst the pandemic. This positively piqued interest from large land owners, hospitality and real estate investors and UHNIs to invest in build-to-suit student housing projects. The sector is projected to continue to grow to USD 25+ billion per annum by 2025.
The structural changes to the student housing industry can be attributed to multiple factors but it is safe to say COVID propelled an urgent need for adoption of these changes.
The next 5-10 years is an exciting time for the student housing and co-living market in India. With the urban migration rates improving, more and more students moving out of their hometowns to study at centers of excellence the market will only continue to grow, and the professional players are well placed to flourish in the growing market. |
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