Global alternative investment major Goldman Sachs has shortlisted Brookfield Asset Management, Alta Capital, and Singapore’s Keppel Corp to sell its stake in India’s largest student housing platform Good Host Spaces, said persons with direct knowledge of the development.
Goldman Sachs holds around 70% in the company that owns and operates third-party purpose-built, on-campus student housing assets across key universities including Manipal University, O P Jindal Global University and Shoolini University.
“The discussions for the stake sale are at an advanced stage and the proposed transaction is estimated to value the company at around $350 million,” said one of the persons mentioned above.
The proposed deal indicates sustained appetite for Indian real estate among global investors. While Brookfield is a Canadian institutional investor and Keppel Corp is Singapore-based investment entity, Alta Capital is a Singapore based fund managed by Blackstone India’s former Managing Director, Siddhartha Gupta.
Started in 2017, the student accommodation company has an operational portfolio of around 25,000 beds across five cities. It is also in talks with several educational institutions and is likely to add a similar number of beds to its portfolio soon.
The platform was initially backed by Goldman Sachs and HDFC. In 2021, global private equity major Warburg Pincus’ affiliate Baskin Lake Investment acquired mortgage lender HDFC’s 24.48% stake along with a primary investment. Warburg Pincus may also explore selling stake in the proposed transaction.
As part of its business strategy, Good Home Spaces partners with universities to provide specialised, custom-built accommodation services to students. With a long-term plan, Good Home Spaces upgrades and operates the on-campus student housing to ensure returns.
The alliance is aimed at offering colleges and educational institutions an opportunity to monetise their non-core student housing and focus on their core activity.
Goldman Sachs, Brookfield, Alta Capital, Keppel Corp and Good Host Spaces declined to comment for the story. ET’s email query to Warburg Pincus remained unanswered until the time of going to press.
The demand for student accommodations, especially after the pause witnessed during the Covid-19 pandemic, has been witnessing a steady revival. This has led to over 10-12% growth in rentals over the last two years, said property consultants.
Given the rise in student enrolments witnessed every year across universities for higher education, the segment offers opportunity for growth for investors and developers. The steady rise in investment appetite among global investors for this asset class is an indication of growth prospects.
The higher education landscape in India has evolved significantly in the last few years with the establishment of several new high-quality private universities.
The new National Education Policy will further improve the global competitiveness of Indian universities, which in turn will require high-quality, professionally-managed student housing facilities. This natural evolution will result in a significant growth of this asset class as seen in other developed countries.
