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In the largest-ever student housing transaction concluded in India, real estate investment and asset management firm Alta Capital has acquired Goldman Sachs' and Warburg Pincus' 100% stake in the country's largest student housing platform, Good Host Spaces, for $320 million, or nearly Rs 2,700 crore.
Goldman held around 70% in the company that owns and operates third-party purpose-built, on-campus student housing assets across key universities including Manipal University, OP Jindal Global University and Shoolini University. The deal with Alta Capital marks the complete exit of both Goldman Sachs and Warburg Pincus.
Prior to this investment, Alta Capital, founded by Siddhartha Gupta, former managing director of Blackstone India, has invested $325 million in India's largest managed office spaces operator, Table Space, and $200 million in Pragati Warehousing. In total, it has so far committed over $850 million in India.
Brookfield Asset Management and Singapore's Keppel Corp were among the other entities that had shown interest in acquiring the company. The buy indicates sustained appetite among global investors for Indian real estate and its emerging segments like student housing.
Started in 2017, the student accommodation company has an operational portfolio of around 25,000 beds across five cities. It is also in talks with several educational institutions and is likely to add a similar number of beds to its portfolio soon. The platform was initially backed by Goldman Sachs and HDFC. In 2021, global private equity majorWarburg Pincus' affiliate Baskin Lake Investment acquired mortgage lender HDFC's 24.48% stake along with a primary investment.
As part of its business strategy, Good Host Spaces partners with universities to provide specialised, custom-built accommodation services to students. With a long-term plan, Good Host Spaces upgrades and operates the on-campus student housing to ensure returns. The alliance is aimed at offering colleges and educational institutions an opportunity to monetise their non-core student housing and focus on their core activity. The demand for student accommodations, especially after the pause witnessed during the Covid-19 pandemic, has been witnessing a steady revival. This has led to over 10-12% growth in rentals over the last two years, said property consultants.
Given the rise in student enrolments witnessed every year across universities for higher education, the segment offers opportunity for growth for investors and developers. The steady rise in investment appetite among global investors for this asset class is an indication of growth prospects.
