Alta Capital’s Rs 2,700 crore deal for ‘Good Host Spaces’ is changing student housing in India.
Alta Capital has bought the entire ownership of ‘Good Host Spaces’, India’s largest student housing platform, from Goldman Sachs and Warburg Pincus. The transaction is valued at approximately Rs 2,700 crore, making it the largest student housing deal in India.
Previously, Goldman Sachs held a majority stake of around 70% in ‘Good Host Spaces’. This company is responsible for the operation of purpose-built student housing on various university campuses, including Manipal University, OP Jindal Global University, and Shoolini University.
The successful conclusion of this deal represents the complete exit of both Goldman Sachs and Warburg Pincus from the student housing platform. The negotiations had been ongoing for a few months and were finalised last week.
Alta Capital, led by Siddhartha Gupta, formerly a managing director at Blackstone India, has shown considerable interest in the Indian market. Before this acquisition, they invested Rs. 3,250 Crore in Table Space, India’s most extensively managed office spaces operator, and 2,000 Crores in Pragati Warehousing. In total, Alta Capital has committed over Rs. 8,500 Crores to Indian ventures.
Other entities, including Brookfield Asset Management and Singapore’s Keppel Corp, had also expressed interest in acquiring ‘Good Host Spaces’. This purchase highlights the continued enthusiasm among global investors for Indian real estate, especially in emerging sectors like student housing.
Established in 2017, ‘Good Host Spaces’ currently manages around 25,000 student beds across five Indian cities. The company is in discussions with various educational institutions to add a similar number of beds to its portfolio shortly.
Initially, the student housing platform was backed by Goldman Sachs and HDFC. In 2021, Warburg Pincus’ affiliate, Baskin Lake Investment, acquired HDFC’s 24.48% stake, along with a primary investment in the company.
‘Good Host Spaces’ adopts a business strategy that involves partnering with universities to provide tailor-made accommodation services to students. Their approach focuses on upgrading and managing on-campus student housing to ensure returns for all parties involved.
This partnership aims to offer educational institutions the opportunity to monetize their non-core student housing facilities while focusing on their core academic activities.
The demand for student accommodations, particularly after the disruptions caused by the Covid-19 pandemic, has been steadily recovering. This resurgence has led to a rental growth of 10-12% over the past two years, as reported by property consultants.
With the consistent growth in student enrollment at universities for higher education, the student housing sector presents opportunities for both investors and developers. The increasing interest from global investors in this asset class reflects the growth potential it offers.