A new market for student digs, with frills, sparks developers’ interest
New Delhi, December 4:
At Vatika India Next, an integrated township coming up in New Gurugram, a hundred apartments are reserved for student housing. These will meet the needs of the Indian School of Hospitality (ISH), which will open its doors to students in August 2018 and in which Vatika is an investor.
“Hostels are passé; at 18, students want to experience independent living,” says Dilip Puri, former Starwood South Asia MD and founder and CEO of ISH, who persuaded Vatika to provide for apartments of global standards, rather than a hostel, for students.
Vatika is perhaps the first developer to get into purpose-built student housing, which AS Sivaramakrishnan, head, residential India, CBRE South Asia, describes as an abridged version of a service apartment. Of the 5,000-plus apartments planned in the township, Vatika has managed to get back some 60 apartments from investors on long lease and is fitting them out as per students’ needs, with plenty of frills.
“It will not be just beds in rooms; it will have facilities such as laundry services, food and beverage and be managed through apps,” says Gaurav Bhalla, Managing Director, Vatika Hotels, and Director, Vatika Ltd. Right now, Vatika is providing housing for students of ISH; going forward, he says, it could expand the number of student units to cater to Amity University and other educational institutes nearby.
Student housing is suddenly the talk of the town in the real-estate space. While Vatika may be the first developer to explore this opportunity, across the country a slew of tech-based start-ups such as Your Space, CoHo, WudStay are creating branded accommodation for students by aggregating rooms near colleges, and re-purposing them imaginatively.
With facilities like gyms, zumba classes, independent kitchenettes, food delivery, and even shuttle services to colleges, these residences are altering the face of student accommodation. Students no longer need to slum it out in hostels or ‘digs’ of varying quality. Karan Kaushish, co-founder of Your Space, which started off in January 2016, says the start-up has 300 beds across Delhi, Mumbai and Greater Noida, with an occupancy of 95 per cent. “We are expanding into Chandigarh and Pune and looking at Kota,” says Kaushish, talking about touching 100,000 beds in five years.
His optimism arises from the capacity shortage of hostel rooms on campuses. Says Kaushish, “Only 18 per cent of students find accommodation on campus.” Take a college like LSR in Delhi, where over 2,000 students are enrolled, but which has just 300 beds in its hostel. Even if 50 per cent students are from Delhi, there are at least a few hundreds who end up as PGs in places with severe restrictions.
CBRE’s Sivaramakrishnan pegs the opportunity for student housing at ₹16,000-18,000 crore, based on data on student loans, capacity shortage and parents’ growing willingness to spend. “Aspirations of parents and children have gone up and the upper middle-class is willing to spend on better stay options. So these facilities had to pop up,” he says.
The other reason why student housing has started trending is because the yields are good. “These innovations in housing are carved out of the slowdown,” says Sivaramakrishnan, who says models like student housing are created for investors.
“Rental yield from residential is just 1.5 per cent while student housing could potentially yield 5 per cent,” he says.
Your Space charges ₹12,000 per bed in Greater Noida, ₹18,000 in South Delhi and ₹25,000 in Mumbai. It also matches flatmates by pairing same colleges or same courses.
With 41 per cent of India’s population below age 21, there’s certainly a lot of room for growth in student housing.
(This article was published on December 4, 2017)