Realty firms find fertile ground in education
Existing land banks save 30% of initial costs
Feb 05, 2014
Source : The Hindu


DELHI: Real estate may be on a slow lane but education is booming, thanks to India’s huge demographic advantage.

Sensing an opportunity, real estate players are finding a sitting duck in the education business. Many are using their land acquisition and development skills to set up ventures to cater to the education space.

While many realty firms claim that the branching out is just part of their CSR activity, industry watchers are quick to point out the additional revenue stream from brand new universities and schools.

They also note that schools and universities within townships are more or less common, as mixed-use development gains more prominence.

Players such as Prestige, Mantri, 3C, Ambuja Realty and Embassy are already in the education space with schools and higher education programmes on stream.

Recently, Supertech announced the launch of Supertech University in Uttarakhand at an investment of ?750 crore. RK Arora, CMD, Supertech, said: “Supertech University will be our first venture in the education sector”.

Kumar Urban Development Ltd (KUL) has tied up with Sunny Varkey’s GEMS Education to set up GEMS Modern Academy (GMA) in Pune, billed as a world-class international school. The school is strategically located at the KUL Ecoloch township, spread over 100 acres.

The school will be developed by KUL and run by GEMS Education.

Kruti Jain, Director of KUL, said: “KUL has always promoted education at every level while keeping quality in mind. This is a KUL’s anthropological engineering initiative”.

Land costs

Several realtors Business Line spoke to said that over 70-80 per cent of the investment in the education venture goes towards infrastructure and land costs. Most players who already own land tracts are able save at least 30 per cent on the initial costs.

A DTZ survey said: “The quantum of physical infrastructure and real estate development required to address the aspiration of GER (gross enrolment ratio) enrolment is a Herculean task and cannot be achieved by the government or educational institute operators alone. This provides significant opportunities for real estate developers for creating physical infrastructure in the education landscape.”

With a population of around 1.2 billion and over 144 million potential customers for higher education, the country is now ranked amongst the largest markets globally, the report said, adding that there are around 25,000 colleges and 460 universities.

According to the survey, nearly 5,550 million sq ft of real estate demand will arise from the higher education sector to achieve a GER of 30 per cent by 2020. This includes development of educational institutes and support services such as hostels and retail space.

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