Chennai: The student housing sector has the potential to attract $50 billion to meet the current supply-demand gap, from $100 million received last year, said a report.
Released by property consultant Knight Frank, the report titled, “Global Student Property 2019”, said, “The purpose built student accommodation (PBSA) market in India is in its infancy, despite the country boasting one of the largest populations of undergraduate students in the world.”
More than 34 million students are currently enrolled on courses at universities across the country, and this figure is expected to rise, it added. Of the 34 million current students, over 70 per cent are located in the 10 biggest States.
“There are currently 1.6 million PBSA bed spaces in India, a figure which represents just four per cent of total student enrollment. The majority of this accommodation is operated outside of university control by private owners. Often it is off-campus, of poor quality and with little modern value-add facilities such as WiFi or laundry services,” the report said.
Knight Frank has estimated that the current demand for PBSA bed spaces across the country totals more than eight million. The demand is expected to grow at a rate of around eight per cent each year until 2025 to around 13 million beds.
“Around $100 million was invested into the Indian PBSA market in 2018. Knight Frank estimates the current potential demand for PBSA in India to be approximately $50 billion. This is based on eight million beds and an average value per bed of $6,250,” the report said.
Only 20 per cent of the current demand is met by university-operated supply. The student housing market in India is driven by a large volume of private owners with relatively small portfolios of off-campus hostels.
There is currently a potential to deliver six million bed spaces on greenfield land located in proximity to universities, while a further two million can be delivered on brownfield land.
The number of Indian students currently studying outside the home country is about 2.55 lakh students, while the number of universities in India is recorded at 864 in 2017, said the report.
| Expert speak |
| Global head of Student Property, Knight Frank, James Pullan: PBSA has become a global asset class, underpinned by a continentally mobile student population and an increased recognition across the world of the importance of higher education. The structural undersupply story is transparent with students attending universities across the world struggling to secure housing in what is a global housing crisis.
CMD, Knight Frank India, Shishir Baijal: The Indian student population base is growing consistently; this growth, coupled with push from the government to promote more enrollment for higher education, is a perfect recipe for student accommodation market to flourish. The forecast is highly promising and is likely to offer investment opportunities in this alternate asset class for domestic and international investors. |