Developing Smart Living Solutions for the New-Age Student Community
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Every year, 13 million students in India migrate within the country in pursuit of better higher education opportunities. A sizable share of this population makes it to the key educational hubs in metros and mini-metros, seeking to live out their dreams and aspirations for learning excellence and to kickstart a successful career. And one of the key requirements of these migrant students are comfortable housing facilities.
What the Data Speaks
As per a report by JLL, Student Housing: Dawn of real-estate sector, a majority of educational institutes do offer hostel facilities, but they are unable to address housing demand to the tune of 30-60per cent of their enrolled students. Further, a research paper by the International Journal of Informative & Futuristic Research (IJIFR) states that an additional capacity of 25 million seats would be required over the next decade to cater to increasing demand for higher education in the country. The Government of India has set a Global Enrolment Ratio (GER) target of 30per cent by 2020. As per the last All India Survey on Higher Education (AISHE) by Ministry of HRD, the GER for the year 2017-18 already stands at 25.8per cent. For most educational institutes, a proportionate scaling-up of their in-house residential facilities is likely to be a challenge. Hence there is a necessity for the industry to gear-up and plug gaps through bespoke student housing solutions.
Currently, most students have to depend on the largely unorganized and poor-quality residential options available in the vicinity of their educational institutes. Unhygienic food, crumbling infrastructure, limited amenities, lack of regular maintenance are some of the most common issues, yet they are not a high priority for operators of a lot of mom-and-pop student living spaces. For students, the hunt for quality accommodation that caters to their lifestyle and managing daily hassles that accompany unorganized residential experiences causes repeated and significant loss of time and resources. Also, student lifestyle preferences are often considered to be at odds with those of residential communities, which has further created a need for student-specific housing solutions.
Globally, student housing is a fast-growing $300 billion industry, with largely standardized operators that address the need for a dedicated asset class focused on student living requirements. Over the last one year, the leading co-living start-ups in US, China and the UK have raised over $530 Mn in funding to cater to a new phase of growth in this segment.
In the Indian context, however, much as there is a need for a great product, there is a strong case for focusing on the service experience. This socio-cultural nuance differentiates the Indian student strongly from the global consumer. Over 85 per cent students and parents are looking for propositions that combine a well-designed regularly maintained space with amenities like food, laundry, housekeeping, WiFi and security under one roof.
With family (parents/guardians) being an important, if not an equal party to the decision-making process, there is a growing demand for an almost hospitality-like product and a willingness to budget for the same in the educational expenses of a student. We find this trait to be consistent across key educational hubs like Delhi, Pune, Bengaluru, Hyderabad, Chennai, Dehradun, Vadodara, Indore and Ahmedabad, amongst others. Also, a very critical element of the student experience is community living. Traditionally, the ease of access to resources and fellow-students for academic support have been strong factors for the high interest in on-campus residences. Community living further creates personal development opportunities through a close-knit network of like-minded peers. That is why a proposition that democratizes these experiences for all students – especially those who must fend for themselves beyond campus – will be welcomed. The expectation is that at the end of a day, the student should have the freedom to concentrate on studies, enjoy immersive community living experiences and focus on their personal and professional growth. Everything else should be taken care of by a supportive student living ecosystem. The entry of tech-enabled start-ups, delivering a consistent and high-quality student-living experience with value-added propositions has led to interest from parents and students alike.
The Supply Chain
Today, professionally-managed student housing solutions are turning out to be a greenshoot for the real estate sector, as well. As per JLL, residential and commercial spaces seem to be stagnating, offering limited returns to the tune of 2-6per cent, student housing operators are delivering rental yields of 8-20per cent. This combination of high rental yields, without the hassle of self-managing student housing set-ups has turned it into a lucrative proposition for real estate owners, landlords and developers. On the one hand, existing supply is being repurposed to create tastefully-designed private living spaces, along with vibrant community entertainment spaces and shared zones like kitchens, balconies, etc. On the other, developers have begun partnering with professional student housing operators to explore built-to-suit solutions.
On the back of growing consumer demand and interest from real-estate stakeholders, the time for bespoke student housing has arrived.