Realty players may find big opportunity in student housing sector here’s how Covid is likely to help

                India has been fast warming up to the concept of student housing in the last couple of years with several developers and investors keeping a close eye 
on the segment. However, the ongoing pandemic has raised some existential questions for this new, up and coming asset class in the near to medium 
term. With social distancing here to stay, the COVID-19 situation certainly challenges the very idea of student housing which is built on the concept of 
shared accommodations and optimising the use of spaces thereby saving expenditure. Schools and colleges have remained shut as the entire country 
copes with the deadly virus that has continued to spread across the nation.

 As health and safety take topmost priority for both individuals and businesses, India’s student housing segment is clearly feeling the impact of the 
pandemic like any other sector. Occupancy levels have significantly declined in the last few months while all expansion plans are currently on hold with 
most student housing providers on a wait and watch mode. But all is not lost for this segment. In fact, the chances of the segment bouncing back 
strongly clearly outweigh the downsides of the current situation.

While a successful medical intervention to the crisis will play a big role in the sector’s recovery, let’s not forget India’s growing youth population that 
comprises students in the age group of 15-24 years. The current dip in demand is a temporary blip and does not indicate any long term trend. Thanks 
to the COVID-19 situation, student housing will only evolve, come back with positive alterations and be more relevant than ever.

 Physical form of education is here to stay

 Virtual classrooms have taken over physical form of education in the aftermath of the pandemic and resultant lockdown. Schools and colleges are 
currently relying heavily on online classes in response to the present situation where physical movement is strictly restricted. However, we believe that 
these are short term and temporary solutions adopted in tune with the current circumstances. Despite the popularity and benefits of online classes to 
many segments of the society, it appears impossible to replace physical education at a certain level of formal education or even higher professional 
courses.

 Physical interactions will remain a necessity for the most part of education in one’s lifetime. And for a vast country like India where quality educational 
institutions are concentrated in large cities and towns, it is only a matter of time when students, who had left for their hometowns, will be back to their 
campuses. Institutions and students are already yearning towards going back to the regular model as there are several feasibility issues and technical 
challenges in continuing with virtual classes on a long term basis.

 Quality services to create distinction

While the concept of student housing has remained in India for decades largely in the form of paying guest (PGs), there are only a handful of organised 
players in the market. In that sense, the organised student housing is at the budding stage right now. On the back of the growing inherent demand for 
such shared student accommodations, several large investment firms and developers have already started the groundwork to enter this space. The 
COVID-19 situation could lead to some of the providers to relook into the plans with a lot of focus on health and hygiene.

 A clear distinction in the market between an organised player offering quality services and products and unorganised housing providers will be 
established in the post-COVID-19 world.  Going forward, student housing firms may have to operate like hospitality operators providing higher quality 
services and experiences to cut themselves from the clutter. During this transition period, the operational cost may increase as these providers try to 
adopt the new norms of physical distancing and hygiene requirements. But in the long run, these facilities will be key to distinguishing themselves in 
the market.

 Future of student housing segment

 For instance, Greater Noida &ndash one of the thriving markets for student housing, a survey by Savills India has found that the city is expected to 
receive a steady demand for student housing developments. Greater Noida represents a significant market for student housing with more than 50 
colleges and approximately 28,000 students enrolling each year for various courses. Approximately 65% of these students are from states other than 
Delhi NCR and form the potential segment of student housing.

 There is an availability of largely three types of housing segments. 55% students prefer housing provided by national and local operators who provide 
accommodation to the majority of the students. Some of them operate on a structured basis offering amenities. 27% prefer hostels provided by the 
educational institutes on campus and 18% prefer small-scale paying guest accommodation and apartments rented out in residential colonies.

 It was observed that the majority of the unorganised supply lacks quality and amenities. A new player that offers good quality student housing with 
grade A standards is expected to set the right benchmark and attract good demand from the market. It is expected that going forward off-campus 
student housing market will pick up demand. Further, the share of organised student housing operators is expected to increase from the previous 
levels, backed by better facilities and services offered by them.

Source: Financial express