Everything has changed for the young in the country from their clothes, food, bikes and cars to how they bank and communicate. But time has stood still in student hostels—cramped rooms, bare necessities and unappetising food. The alternative is poorly run private hostels, living as paying guests or sharing apartments in not-so-welcoming environs.
Real estate services consultancy JLL in its ‘Student Housing: A new dawn in Indian real estate’ report says India has 34 million students in the higher education space with 74% concentrated in the top 10 states and the unmet demand for student housing is very high. The total number of beds in campus housing and private hostels currently available in India is close to 6.1 million and there is unmet demand in all these markets in the student housing segment, says the JLL report.
Start-ups are seizing this opportunity thrown up by the demand-supply gap for quality student housing in the country. Among the early movers in this space is Pune-based Youthville Serviced Hostel. Vineet Goyal, founder of Youthville, says the college and university hostels available currently are rundown and have not been upgraded with the needs of the students. Thus, he saw an opportunity to provide better facilities and make it a more memorable experience. Goyal belongs to the promoter family behind Pune-based real estate company Kohinoor Group. For Goyal, this was about exploring a new asset class in real estate which offers better returns than office and retail real estate. Pune gets three lakh students every year with around 10-15% of them migrant students, while beds on offer in the existing hostel rooms total 5,000-8,000.
Youthville started operations in Pune in September 2017 with 129 beds and will have its first full year from this coming academic year. It is exclusively for girls as security is a big concern and there is willingness to play for a safe and secure facility. “Around 100-odd students have already confirmed for this year and by June 2018 we will be at full capacity,” says Goyal. The second project in Pune will see 260 more beds added with target of reaching 3,000 beds in 18 months in Pune. Around 300 beds could come up in Nagpur.
Currently bookings for Youthville are done directly with students filling the admission form along with the necessary details. Youthville has set up kiosks in a few colleges where students can connect with the hostel. Bookings are for the whole academic year. Students can also search for rooms online but this will not be for this academic session. Youthsville is listed in online hostel marketplaces but it will be valid only till June 30.
Goyal plans to go pan-India in five to seven years and have 25,000-plus beds. “We will be investing around Rs 50 crore this year and look to invest around Rs 100 crore in next three years,” says Goyal. The start-up is also talking to equity players to raise funds and expand. Goyal says some colleges have approached it to be their outsourced partner and take over their hostels and operate them. Given that running a hostel in not an educational institution’s core competence area, these institutes want to outsource the hostel to his company while they focus on the academics, says Goyal.
Youthville’s yearly fees on triple sharing basis works out to Rs 1,35,000 per bed per year while on twin sharing it is Rs 1,83,000 per bed per year. Food will cost another Rs 36,000 annually. The first of the Youthville hostel is only for girls but in future it will be for both boys and girls with separate entrance and access. These hostels will come up in the 5 km-radius of educational institutions and will be slotted in the mid-segment. Goyal says there is demand for high-end student housing and it could add that to the portfolio.
To offer a better living experience, Youthville has well-appointed rooms with bed, study table cupboard, wi-fi and air-conditioner (optional). There is cafeteria, laundromat, library, fitness studio, games room, equipped music room AV room to watch movies or sports events, doctor on call and shuttle service. A small kitchen on every floor is also provided. Security is provided with access control with surveillance cameras in common areas. Events, picnics and birthday celebrations are organised in the premises. Food is served as per menu created, managed and maintained by the students. Goyal says there is a strict ‘no-alcohol, no-drugs and no-ragging’ policy with zero tolerance for any breach. The hostel wardens are replaced by Youthville Buddy, who handhold the student and are their go-to-person for anything they need to make the whole process an enjoyable experience, says Goyal.
Youthville is not the only one. There are others who have already been here. Stanza Living, a student living start-up co-founded by Sandeep Dalmia and Anindya Dutta, has gone up from 100 to 2,000 beds in around a year across Delhi, Noida and Dehradun with plans to go to 10,000 beds in 12 to 18 months across the country. There is Saket Jalan’s Campus Students Communities with student hostels in Bengaluru and Mumbai, Shobhit Maleta’s Inde Campus Student Accommodation and Satyanarayana Vejella’s Aarusha Homes which have identified opportunities in this segment.
“Student housing is a thriving asset class in established markets of the US and the UK, and a fairly large but emerging market in Australia. India however, has a lot to catch-up to do given that we are only making a start now,” says Ramesh Nair, CEO and country head, JLL India. “Student housing has tremendous potential for developers, it provides a window to diversify from presently turbulent sectors to mainstream real estate. For asset management entities and funds, it is an emerging segment with potential to offer returns much higher than established assets,” adds Nair.