STUDENT HOUSING A HOME AWAY FROM HOME

When a student migrates from his home town to any urban cities for education, the first thing that concerns is a proper shelter to live in. After sending applications and browsing websites of colleges, one finally gets into a college or university. Now after this begins the next ultimate battle of accommodation, which is not less than a cat and mouse chase.

Today with changing demands from the students, there is a need of quality accommodation.To fight against the substandard living conditions in hostels of PG homes, the students are now more keen to look for other student housing options.

Currently, India is lacking in terms of Purpose-Built Student Accommodations (PBSAs) which are designed according to the needs of the students. The current facilities that are available in the market are rental units in residential buildings which are leased as Paying guest accommodations. At such accommodations the students are forced to adjust and sacrifice on poorly maintained facilities, deteriorating conditions that are unhygienic or unsafe and amenities that are of poor quality or non-existent.

What leads to this need for student housing?

The answer lies in the growing population and its changing demands. Also, the growth of education sector in India all these years both in terms of number of students and policy changes, has led to the rise in demand for adequate quality student housing and accommodation in India. This demand has given the opportunity for the student housing sector to grow. How much the sector will grow in the country is a wait and watch show.

When compared, the on-campus hostels and PG accommodations are very common in India, the concept of stand-alone student living or housing is now gaining momentum slowly. The need for these stand-alone student housing is due to the affordability, comfort, sense of safety, in-house facilities and proximity to the educational hubs it provides to the students.

FACTORS DRIVING STUDENT HOUSING

Indian real estate sector growth projections shows that student relocations in India which is currently around 11 million is straight away going to touch 31 million by 2036. This projected shift has opened up a significant opportunity for the student housing sector- an emerging asset class. The major factors which give a push to the student housing sector in today’s time includes the sky-rocketing migration rates, lack of facilities and lack of space utilization.

Urbanization Helping to Grow the Market: The rapid growth of cities has necessitated the establishment of higher education institutions, such as universities and colleges, in urban areas.

Growing population: India has the world’s largest 5-24 years age bracket population (about 500 million). Although the student age cohort varies from one state to another, the college-going population is expected to reach 140 million by 2030

Growing Education sector: Thegrowth of education sector in the country with several initiatives and policies aimed at improving the quality of education is contributing to the need for more student housing facilities.

Alternative Accommodation: With the challenges faced in the PG accommodations, students are now looking for alternative options with better facilities in terms of food, safety, services, infrastructure, accessibility and others.

Spending Ability: Now a days the families are ready to spend more on their better housing options for the children once they plan to move out of their city for higher education.

With all these needs to have better student housing in the country at this moment the reality is that there is a major gap in the demand – supply of the same. While the demand is rising day by day, there is a shortage of supply and the industry needs to have a major revolution to meet these demands according to the experts from the industry.

WHERE’S THE GAP

In India the supply of student housing is incredibly tight. The demand for student housing beds has exceeded enrolment growth at large, however the new supply is very low. Meeting this gap is the need of the hour. Furthermore, Indian government launched a "Study in India" campaign in 2018 to provide premium education services to in- ternational students at competitive prices. This campaign is expected to attract approximately 2,000,000 students in India by 2026.

What is leading to this gap is what needs to be evaluated with adaptive solutions for the near future. Three main reasons leading to this gap are higher interest rates leading to lack of financing, rising labour and material costs with regulatory changes, the cash-strapped public universities are unable to fund new dormitory development.

As per the data of Ministry of Human Resources and Development, the country has over 36 million students who are pursuing higher education. With this the student housing generates a massive de- mand for more than 10 million beds across the major focused cities like Pune, Banglore, Gurgaon, Mumbai, Noida, Nagpur and Kota and others. And presently, hostels and facilities in educational institutes only con- tributes to 18-20 percent of student housing demand in the country.

When highlighting the gap in the demand and supply, mentioning some solutions to meet this gap is necessary. First and foremost, demand in the industry is to have a policy framework for student housing. This will help regulate the entire sector. The interested developers will work within the framework while choosing a student housing project. Some of the practices that can be included are tax rebates for the developers, quality food service, government should integrate PPP models with their Youth Hostel Scheme and Study in India Campaign.

WHAT’S THE MARKET

Delhi-NCR and Bengaluru were the first activity centres for the student co-living segment. However, the demand for such accommodations has now expanded to other Tier-1 and Tier-2 & 3 cities too. New student housing opportunities are emerging in cities like Kota, Indore, Coimbatore and Ahmedabad.

The rental rates for accommodation in all these cities vary and is unaffordable for most of the stu- dents’ experts says. In Bengaluru the rate is somewhere between Rs 9,000 to 12,000, in Pune vary between Rs 7000 to 13000, In Delhi – NCR it is between Rs 5000 to 12000 for or 2 BHK shared by 4 occupants.

Due to the increasing demand of student living, several existing key players in the sector has now come up with plans to introduce more spaces or beds for students across the country.

Key players:

• Stanza Living currently has 70,000 beds across Dehradun, Vadodara, Indore, Coimbatore, Jaipur, Kota, Ahmedabad, Manipal, Kochi, Va- dodara, Vidyanagar, and Nagpur.
• Housr Co-Living has a presence in Gurgaon, Hyderabad, Pune, Ban- galore and Vishakhapatnam, with plans to expand in Delhi and Kota by the end of the financial year.
• Your Space, has 5,500 beds across Delhi, Mumbai and Pune and aims at having a total of 20,000 beds by 2024 in prominent education hubs like Jaipur, Bengaluru, Hyderabad, Chennai, Kota, and Kolkata.
• Olive Living, managed by Embassy Group, has a stock of 2,500 beds and looks at adding another 20,000 over the next few years.
• Crib made an investment exceed- ing $1 million to develop Crib Plus, a property management app. The new version will cater specifically to the needs of large-scale student housing and co-living brands.
• Coliving Startup Union Living introduced Mumbai’s biggest student accommodation - Varsity by Union Living in the coveted Santacruz-Juhu area, a luxurious student accommodation.

GST EXEMPTION AND NEW MEASURES

The need for better policies to make student housing easy and convenient in the country has been highlighted every now and then. The recent GST exemption on ac- commodation services charging up to Rs 20,000 was welcomed by the major players in the co-living sector, however they also expressed there is more to be done to make the sector more feasible for investors as well students. There is a high demand on considering these accommodation services as residential dwellings and exempting them totally from GST.

Some of the operators in co-living segment expressed that in re- cent years, the GST on residential dwellings has been a grey area. As per new notification hostels and accommodations for working professionals are exempt from GST within certain limits. This provides much-needed clarity for operators. However, in the long term, these should be classified as residential dwellings, thereby exempting them from GST without any limits.”

As per the industry stakeholders, “The GST council's recommendation to exempt GST on accommodation services charging up to Rs. 20,000 per month per person is a welcome move. This will benefit a large number of co-living companies, especially those in student housing segment, where monthly charges typically fall below this threshold across the country. Going further the government should come up with some solutions like tax rebates , food services provided by the service providers should undergo a stringent quality check, government should integrate PPP models with their Youth Hostel Scheme and Study in India Campaign.”

CHALLENGES REMAIN

Student housing in India still has a long way to go to emerge as an organised part of real estate sector. It is still unorganised, and needs policies and frameworks to make it more organised for both the investors as well as the.

The major challenges the sector is facing is affordability. The demand to have better facilities, accommodations with modern amenities will students definitely lead to an increase in the property prices as well as the rental prices. The students who are out for their study and not yet earning by their won will find it difficult to spend to live in such spaces. What is required is policies to make it student friendly. Our young blood who are to lead the future are left in a helpless state, due to lack of a collaborative approach among the policy makers, top players in the real estate sector, educational institutions. Finding a home away from their home should not be a task for them.

A comprehensive solution will enhance the academic journey for young learners and it will further foster holistic development by unlocking numerous opportunities across diverse verticals such as infrastructural growth, job creation. This directly will enhance the country’s reputation globally as a premier destination offering state-of-the-art education alongside cutting-edge living facilities that benefit the nation on both economic and societal levels.

As per industry reports, the construction of new student haousing has decreased - the annual average number of new beds delivered from 2021- 2023 was 33,700, down from an annual average of 56,200 in the preceding seven years.

The current demand for purpose-built student accommodation (PBSA) across India totals more than 8 million bed spaces. It is further expected to grow at a rate of around 8% each year, to reach 13 million beds by 2025 according to industry reports.