Alta Capital has secured a significant deal in India's largest student housing transaction by acquiring a 100 percent stake in Good Host Spaces for $320 million, marking the complete exit of Goldman Sachs and Warburg Pincus. Good Host Spaces operates purpose-built on-campus student housing assets at key universities. Founded in 2017, it manages an operational portfolio of around 25,000 beds across five cities, with plans for further expansion. The company partners with universities to offer specialized accommodations, enabling institutions to monetize non-core housing assets. The strong investor appetite for Indian real estate and the student housing sector is evident in this transaction.
Alta Capital, a prominent real estate investment and asset management firm, has executed a historic deal, marking the largest-ever student housing transaction in India. In this significant move, Alta Capital has acquired a 100 percent stake in Good Host Spaces, the country's largest student housing platform. The deal is valued at an impressive $320 million, which translates to nearly Rs 2,700 crore. This transaction represents a pivotal moment, resulting in the complete exit of Goldman Sachs and Warburg Pincus, two renowned financial giants that previously held a substantial stake in Good Host Spaces.
Goldman Sachs, one of the world's leading investment banks, owned approximately 70 percent of the company. Good Host Spaces, known for its purpose-built on-campus student housing facilities, has strategically positioned itself in proximity to major universities, including Manipal University, OP Jindal Global University, and Shoolini University. This acquisition is not only a financial milestone but also a reflection of the robust appetite among global investors for the evolving real estate landscape in India. The deal itself had been in the making for several months, and it was consummated just last week.
Alta Capital, under the leadership of Siddhartha Gupta, the former Managing Director of Blackstone India, has displayed a commitment to the Indian real estate market. Previously, the firm invested $325 million in Table Space, India's largest managed office space operator, and an additional $200 million in Pragati Warehousing. Altogether, Alta Capital has pledged an impressive sum of over $850 million in investments within the Indian real estate domain. Earlier this year, it was reported that Alta Capital was in advanced discussions regarding the acquisition of Good Host Spaces.
Several other entities, including Brookfield Asset Management and Singapore's Keppel Corp., had expressed interest in acquiring the company. However, it was Alta Capital that ultimately clinched the deal. Good Host Spaces, operational since 2017, currently manages 25,000 beds in five cities and is poised to grow its portfolio by adding an equivalent number of beds through ongoing negotiations with educational institutions. Goldman Sachs and HDFC initially supported it, but later, Warburg Pincus' affiliate Baskin Lake Investment acquired HDFC's 24.48 percent stake and made additional investments.
While both Goldman Sachs and Alta Capital have refrained from commenting on the specifics of this transaction, it undeniably underscores the sustained global interest in Indian real estate and its diverse sectors, including the burgeoning student housing market. Good Host Spaces partners with universities, offering customized student accommodations. Their core strategy involves upgrading and managing on-campus housing and delivering long-term returns. This partnership enables educational institutions to monetize non-core housing assets and prioritize their primary mission of providing quality education.
The student housing segment has been witnessing a steady revival, particularly following the disruptions caused by the Covid-19 pandemic. This resurgence has led to notable rental growth, ranging from 10 percent to 12 percent over the past two years, according to property consultants. The consistent rise in student enrolment for higher education across universities suggests significant growth potential for investors and developers. Furthermore, the sustained interest of global investors in this asset class highlights its promising outlook and long-term investment prospects.
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