The rise of new-age managed marketplaces is aligned with the government’s ambitious plans of attracting international students and boosting the global rankings of Indian universities.
By Mayank Maheshwari
Student housing is one of the most pressing concerns in the higher education landscape. It is estimated that a mere 4% of the 36 million students currently pursuing graduation and PG in India are able to access campus hostel facilities, and the majority is forced to depend on restrictive and cost-intensive alternatives like accommodation services offered by PGs.
In response, various private players are stepping up to resolve the challenges in the student housing sector. Some of the emerging trends in this area are:
The rise of student-centric managed marketplaces: Due to increased family income, the demand for service-oriented accommodation has shot up. Numerous enterprises are entering the market with the goal of catering to this demand through purpose-built student accommodation (PBSA), which are now becoming the preferred housing option for students. By means of such offerings, both emerging and established managed marketplaces aim to provide services that are in sync with the evolving preferences, tastes and sensibilities of new-age students.
Growing investor interest: A Knight Frank report notes that only 20% of the demand for student housing in higher education is being met by universities in India. As a result, the PBSA market has begun to attract significant investment interest, which, as per the report, stands close to $50 billion. Last year, India saw barely $100 million worth of investment in PBSA. As investors are recognising the value in supporting up-and-coming start-ups working in this industry, this figure is expected to increase.
Introduction of greater structure in a primarily unorganised market: The differentiating factor of PBSAs is their customer-centricity. Housing options under this arrangement are in sync with the needs of modern-day college-goers. Their rise marks a departure from the fragmented sector dominated by restrictive and unorganised housing providers such as PGs. It is no wonder that the demand PBSAs currently address in India stands at over 8 million bed spaces. According to the same report, this number is growing at a rate of 8% year-on-year and is expected to reach 13 million beds by 2025.
The rise of new-age managed marketplaces is also aligned with the government’s ambitious plans of attracting international students and boosting the global rankings of Indian universities.
The author is co-founder and COO, University Living, an accommodation provider for overseas students