Betting big on the student accommodation segment, Sanctum Wealth Management is advising its investors to increase their allocation and work simultaneously with property developers and operators to reap maximum yield in the fast-growing segment which has recently caught the attention of firms such as Oyo, Stanza Living, etc.
“One of the areas in the housing sector with potential, which has done well overseas, is the area of co-living, co-working, student housing, etc. Not only does this solve the issue of huge unsold inventory but also gives a better rental yield at 8-10 per cent,” said Prateek Pant, head of products and solutions, Sanctum. The size of the market is huge since the study claims over 300 million millennials are set to join the workforce and over $50 billion in investment is required to develop student living areas.
“The important part here is to advice to develop suit units for a specific purpose. The size of student houses are around 200 square feet, which can be developed at a cost of Rs 25 lakh and give a rental in excess of Rs 20,000 per month (North Campus area),” Pant added. On Friday, the wealth management firm in association with Your-Space, a start-up which is into student housing, opened a 200-bed accommodation centre near the North Campus, Delhi University. Residential societies around the university have seen a boom in the number similar start-ups.
Pant said that his company is open to working with more operators and developers in the future to increase their presence in the segment. “We already have three thousand beds across India in our inventory and the plan is to add another 3,000 by next year. In the next year, we expect to have 20,000 beds in locations such as Manipal, Mumbai, Ahmedabad, Kota and many more,” he added. Pant also remained bearish on the residential real estate market and said he will not advice investors to invest money in it.