The student housing markets in the US and UK are an established ‘alternative’ real-estate asset class. With the education sector in India growing rapidly, the student housing too has the potential to be a lucrative real-estate segment. Rohit Pateria, Co-founder & CEO, Rental Stay Private Limited (Placio) that provides branded student housing facilities further explains.
Noida and Greater Noida are the fast emerging education hubs of India. The growing number of institutes and a significant increase in the numbers of students here has created a huge demand for rental housing in the vicinity of the colleges. However, the residential facilities of colleges or those offered by unorganized players are invariably under-equipped to match the demand and often fall short of the international standards.
In 2016, Amity University incubated a student housing start-up, Placio, now registered under the Startup India flexi scheme of Department of Industrial Policy & Promotion, Government of India. Headquartered in NOIDA, the company offers premium facilities at affordable prices while assuring a secured yet independent stay.
“A recent study of the student housing market reported the segment to be worth $50 billion market. With the increasing number of students enrolling for higher education each year, student housing is obviously a complimentary product to this growth. But, student housing as a product is severely undersupplied and un-standardized. Placio was started to solve this particular problem and the main idea was to create a structure which can be next unicorn of India. After a lot of research, product development and improvisations re-creation, an intellectual property was created that could offer co-living spaces to students and the working community.” Rohit elucidated.
At present, Placio has a capacity of 1200 beds facility around Amity campus at Noida. The facilities include fully-furnished homes, air-conditioning, power backup, 24hour security, professional facility management and high quality meal for a comfortable stay. The 24/7 SOS helpline (medical and non-medical) adds to the security and concern aspects of the residents. The company has one community manager for every 100 students/residents who takes care of the day-today issues. Rohit added, “Placio also works in partnership model with the property owners. We sign a service provider agreement, so it becomes an exclusive Placio property. The company manages marketing & branding, system implementation, property management and operations.”
The important factors in student housing developments are the well managed premises, hyper-local facilities and proximity to university campus. Also, community living so that students can remain connected with each other and safety & security are the other top considerations.
The Lease-rental Model
According to Rohit, Placio housing is as affordable as any PG accommodation or private hostel. The extra charges are only for the value additions and professional services. “While the University campus is at a walking distance, the nearest market and hospital are in the range of three to five kilometers. The students can keep their vehicle in the premises. Priced between INR 10,000 and INR 25,000 per month, Placio properties have three categories namely Placio Dorm, Placio Prime, and Placio Luxe. The properties range from single room to double or triple sharing basis as per the requirement and demand. ; Placio provides pick and drop facility and has several third party service providers like cycle and bike rental services, guest houses and hotels for visitors of students who need to stay overnight. We also offer discount cards and plan to tie up with a start-up for providing books on rentals,” he stated.
The Differentiators
- Technology: Placio is using technology as an enabler to render services. This includes both customer relationship management (CRM) and property management platform. While a student can book a room or bed online by paying a token amount for the session on the company’s website by logging through one’s Facebook or Linkedin account. The website showcases property pages with full description of the chosen property, its amenities, pricing, distance to nearest hospitals, markets, police station, bus stand, railway station, and airport, and rules of living and payment, among others. Additionally, through the registration section, one can sign up to create one’s profile and upload identity card and Aadhar card for verification. The company would soon launch its mobile application with integrated CRM, which would facilitate the resident student to lodge complaint regarding any services/maintenance, interact with customer care executive, besides sharing feedback about the quality of services.
- Emergency Helpline: Placio 24X7 student emergency helpline in collaboration with 24Response.com, India’s 1st on demand safety service provider, provides immediate assistance to the users. The smart phone app track the resident’s location and connect him/her with the 24Response command and control centre besides sending an alert to the nearest team for assistance.
- Parent’s Helpline: Through ‘parent helpline’ they can know about their child’s wellbeing in case they want to get connected through Placio. Dedicated community manager would keep in touch with the residents and help in case of any distress or difficulty. Parents could have direct connection with the community manager to know anything about their child.
- Food: Placio properties provide a diverse range in menu to suit the food habits and nutrition needs of students coming from different part of India and abroad. The company would also allow residents to make their own menu in consultation among themselves.
- Recreation: On offer are cable television, sports lounge with several indoor games like Pool, Table Tennis, and Fook Ball and an in-house gymnasium.
The Marketing Strategy
“The strategy is very simple, understand the demand and create the capacity accordingly.For example, there are more than 15000 students of Amity University who live outside the campus because the campus hostel has the limitation of accommodating only 5000 students. Now these 15000 students would go to a PG or a rented apartment for accommodation. So, for Placio it gives clear potential market of around 15000 students. On the other hand, partnering with a developer will provide great synergy. They have inventories which are vacant and can be transformed into student housing thus, creating commercial value to the idle inventories. While, the average return on residential rental is around two percent, in case of Placio the figure goes up to five percent.
The key to success is to provide value both in term of user experience and commercial returns. Working closely with the universities, understanding the requirement and channelizing the demand is the prerequisite for student housing, to make it a lucrative rental-yielding commercial project.
Challenges & Growth
The company current set of properties are at Noida. In its next phase of expansion, Placio aims to bring similar network of properties to other cities including Gurgaon, Lucknow, Jaipur, Ghaziabad and Pune known for leading educational institutions, where a significant number of students come for studies. Briefing on the challenges during the initial phase, Rohit concurred that any new concept has its own resistances. “When Placio started, people were not yet ready for the concept. The tie-up for first few properties was not easy at all. Slowly and gradually the trend started picking up. Now, there are more than 15 Placio properties. The success of these properties will drive the business expansion in other cities. In next 3-4 years, the target is to reach one lakh beds in 3-4 cities. The immediate area for expansion will be Delhi-NCR.
