The education sector in India is growing fast. With the increasing number of students enrolling for higher education each year, student housing is obviously a complimentary product to this growth. Interestingly, the opportunity has come at a time when residential real estate is currently slow and certain developers could bank on this opportunity to transform specific under-construction residential projects into student housing, bringing it under the more lucrative rental-yielding commercial project stream.
Emerging concepts like student housing can help developers and investors diversify into an income-yielding asset class that can potentially offer higher yields than the commercial office and retail properties because of a favorable demand-supply scenario.
In abroad, mainly the US and UK markets, student housing is already an established and investor-friendly asset class because of its size and attractive market yield. Globally this segment, which has already attracted 200 billion dollars of investment, is essentially operated on a lease rental basis.