Pune, one of the major cities to focus on student housing
Student accommodation is set to boom over the next five years, with developers gearing up to focus their energies on Pune and Bengaluru.
The interest in student accommodation is a by-product of the lull in the residential sector and diminishing returns from the commercial sector.
While Maharashtra lags in the supply of such projects in the country, with Pune, Mumbai, Kolhapur and Nagpur boasting of the most shortfall, reveals a recent study by property research group JLL.
As per the pan-India study, conducted three months ago, student accommodation was earlier restricted to the boundaries of large college campuses or universities, but is starting to draw the attention of developers and investors alike.
Subhankar Mitra, the property research group's local director of strategic consulting, told TOI that while Maharashtra leads in the large gap between demand and supply, it is closely followed by other states such as Karnataka, Gujarat, Tamil Nadu and Rajasthan.
"Developers had ambitious plans to scale up the existing student housing capacity by close to 100% annually over the next 4-5 years," said Mitra, citing the study.
The study pegs the focus on Pune and Bengaluru, both of which have a significant concentration of students. Other cities including Hyderabad, Indore and Kota are also taken into account by the study.
Maharashtra CREDAI president Shantilal Kataria told TOI that their Pune chapter has worked to increase student housing in the city for eight years.
The new development control rules relaxing FSI for hostels will only boost this sector.
"Pune being the hub of education and IT, developers could see this as a lucrative side business," Kataria said.
He also plans to urge the Maharashtra government to introduce premium 3 FSI, particularly for developers who construct ladies hostels which are sorely lacking.
While campus accommodation is the preferred option, nearby paying guest facilities are the go-to choice for those who don't get on-campus accommodation.
But they are badly hit by many societies, which display notices on their gates forbidding students.
According to statistics, India has approximately 3.4 crore students pursuing the higher education. Leading states are facing a sharp shortage of student housing, to the tune of 30-60%.
Developers slowly embracing this sector, with an attractive rental yield of 15-18% providing them with the incentive.
"Developers seem excited by the potential for growth," Mitra added.
"With support from the government in terms of tax incentives to developers, the student housing initiative could help bridge a larger social concern about low student enrolment, women's participation in higher education, attract more foreign students to India and so on," the report said, drawing the attention of all stakeholders including HRD ministry.
Source: Times of India, Jul 19, 2017