Why Student Housing is a promising deal in INDORE?

studenthousingBy Devendra Dungarwal

Accommodation Times Bureau


In last 10 years, Indore has established itself as the educational hub of central India, and with students migrating from small towns and villages near Indore, the need and scope  to provide them affordable accommodation has increased manifold. Parents of such students who shift to Indore are mostly concerned and sceptical about the food and living conditions that their children would be living in.

In Indore and even in India, student housing area is pretty much untapped, unorganized and is expected to have a $10 billion dollar market in the country. In Indore alone, approximately 75 thousand students migrate every year to the city to pursue different regular and professional courses. While the local colleges and institutes do provide in house hostels or guest houses, the kind of living spaces and amenities provided are quite limited both in terms of quality and quantity. Implementing security measures in private hostels is very inadequate. At least 70% migrating students face the problem of finding a suitable accommodation. A lot of private hostels have mushroomed in almost every corner of the city as the density of students has been increasing at an alarming rate. The problem, however, still persists, leaving a lot of scope for builders to come up with real estate projects especially designed for students. Majority of the students are dissatisfied with college or private hostels or accommodation.

There are 3 types of out stationed students that real estate project can target for student housing in Indore:

1 . Students from upper middleclass families of tier 3 cities – They have a strong financial backing and prefer living with extra amenities and comfort. The kind of courses they pursue or institutes they join are high level and expensive. They would prefer accommodation with facilities like Wi-Fi zone, gym, cafeteria, cleaning and laundry services, salon, library, AC etc.

2. Students from upper middleclass families of tier 1 cities – Many a times, bright students from metros or big cities, do not get the stream or course of their choice and hence move to tier 2 cities to pursue the course they desire. They do not mind shelling out money for a comfortable living.

3. Students from middle/lower middle class family of tier 3 or 1 cities – They look for basic accommodation needs like proximity to the institute, affordable rent, security, food, hygiene etc.

The gap between student mobility and quality accommodation in the city creates surplus opportunities for investors and service providers to capture student housing market.

The 3 real estate business models that can be implemented are:

1. B2B Model – This is an on campus approach wherein the service provider or investor enters into a long term contract with the educational institutes.

2. B2C Model – This is an off campus approach where spaces or facilities are leased to students directly.

3. Miscellaneous Start Up Models – While big cities already have start-ups like YourSpace, WudStay, StudentAcco, PepRooms entering the space, Indore is yet awaiting at least some of these, or may be new entrants, to take initiatives and come up with concrete plans for the city. Some start-ups in big cities work as aggregator of properties where in they take properties on long term leases, refurbish them and then charge the students. Others partner with the landlords, and charge the landlord a fee for maintaining the property. Some of these start-ups have 100% occupancy rates in big cities.

Irrespective of the business model followed, the investment in student housing projects seem to be a lucrative deal for builders and investors as demand for higher education is only going to increase in the coming years.

Most of the colleges and coaching institutes are located in the prime areas like Bhawarkuan, Geeta Bhawan, Palasia, Race Course Road, Vijaynagar and practically every institute has multiple centres or offices, that clearly shows how education is gaining commercial importance in the city and its high time investors start exploring this arena.

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