Brookfield, Alta Capital, Keppel consider acquiring Goldman Sach's Good Host Spaces stakes

Goldman Sachs, a distinguished global alternative investment firm, has meticulously shortlisted Singapore's esteemed players, including Brookfield Asset Management, Alta Capital, and Keppel Corp, as potential suitors for its stake in the illustrious student accommodation platform, Good Host Spaces, which stands as India's largest in its class. In this dynamic pursuit, discussions have advanced, envisioning the prospective transaction placing the company's valuation at a noteworthy $350 million, according to sources well-versed in the matter.

This strategic proposition unveils the unwavering allure of India's real estate landscape for international investors. Brookfield and Keppel Corp., distinguished institutional investors hailing from Canada and Singapore, respectively, alongside Alta Capital, a Singapore-based fund under the astute guidance of the former Blackstone India CEO, Siddhartha Gupta, stand poised to explore this exceptional opportunity.

Established in 2017, Good Host Spaces manages a portfolio of approximately 25,000 beds in five cities, providing purpose-built campus student housing assets at prominent universities like Manipal University, OP Jindal Global University, and Shoolini University, nurturing an unparalleled experience for the bright young minds of tomorrow. With constructive dialogues underway with various educational institutions, the company aspires to enrich its pipeline with an equivalent number of beds, perpetuating its remarkable growth. Good Host Spaces, initially supported by Goldman Sachs and HDFC, received additional investment in 2021 when Baskin Lake Investment, a subsidiary of Warburg Pincus, acquired a 24.48 percent stake from HDFC, strengthening its influence through a principal investment. In the proposed transaction, Warburg Pincus might explore the sale of its interest as well.

As part of its strategic approach, Good Host Spaces collaborates with universities to deliver tailored and specialized housing services for students. The company ensures profitability by upgrading and managing student housing on campuses, allowing universities to focus on their core businesses while monetizing their non-core student housing. Goldman Sachs, Brookfield, Alta Capital, Keppel Corp., and Good Host Spaces maintain prudent silence on the matter, withholding any official comments. Meanwhile, an inquiry by ET to Warburg Pincus remains suspended in anticipation of an anticipated response. The demand for student accommodation has experienced steady growth, rebounding after the lull during the Covid-19 pandemic. This resurgence has resulted in rent increases of more than 10–12 percent over the past two years, as per property consultants.

With the continuous rise in student enrolment in higher education institutions, the segment presents lucrative opportunities for investors and developers alike. The growing investment interest from global players in this asset class underscores its potential for further growth. India's higher education landscape has evolved significantly in recent years with the establishment of numerous high-quality private universities. The implementation of the new National Education Policy is expected to enhance the global competitiveness of Indian universities, leading to a higher demand for well-managed student accommodation facilities. This organic development mirrors the growth seen in developed countries, positioning the student accommodation sector for substantial expansion in India.

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Brookfield, Alta Capital, Keppel consider acquiring Goldman Sach's Good Host Spaces stakes

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