Global Investors Engage in Intense Bidding War for Lucrative Student Housing Company

Global investors in race for student housing company Good Host Spaces

Introduction: In the competitive landscape of student housing, global investors are engaged in a fierce race to secure a stake in Good Host Spaces. This sought-after company, owned by American private equity giants Goldman Sachs and Warburg Pincus, has attracted bids from prominent players like Brookfield Asset Management, Actis, and Keppel Land. With Goldman Sachs planning to exit after the deal, the stakes are high for these investors seeking to capitalize on the booming student housing market.

Details of the Deal: Goldman Sachs currently holds a 75 percent stake in Good Host Spaces, while Warburg Pincus owns the remaining share. Sources reveal that the deal’s estimated value falls within the range of $300 million to $500 million (₹2,475 crore – ₹4,126 crore), although this figure remains unverified. The decision by Goldman Sachs to divest its investment after a six-year tenure indicates their strategic move in the market. However, specific information about Goldman’s investment in Good Host Spaces is currently unavailable.

Background and Growth: Founded in September 2017 by Nimesh Grover and Stanley D’britto, Good Host Spaces initially received backing from Goldman Sachs and HDFC. In early 2021, Warburg Pincus affiliate Baskin Lake Investment acquired HDFC’s 24.48 percent stake in the company for ₹216.18 crore. Subsequently, reports emerged stating that Warburg Pincus aimed to increase its stake in Good Host Spaces to 50 percent over the next 18 to 24 months. Currently, Good Host Spaces manages around 20,000 beds across renowned educational institutes such as Manipal University, O P Jindal Global University, and Shoolini University. The company has expressed its intent to expand its portfolio to accommodate 50,000 beds in the near future, with ongoing talks with other prestigious institutes.

Key Players: Among the contenders for acquiring Good Host Spaces, Brookfield Asset Management has displayed significant interest in Indian real estate. Notably, they acquired Unitech Corporate Parks’ assets, the Powai assets of the Hiranandani brothers for $1 billion, and commercial assets of Bengaluru-based RMZ, including COWRKS, their co-working company, for $2 billion in 2020. In February 2021, Brookfield successfully listed its real estate investment trust (REIT) through a public issue, raising ₹3,800 crore.

Actis, another prominent investor, has already formed a strategic partnership with Tata Realty and Infrastructure for investing in office assets. Additionally, Actis announced plans to invest over $700 million in developing properties for life space companies last year.

Keppel Land, the property arm of Keppel Corporation, has also made significant investments in Indian real estate, further intensifying the competition among global investors.

Conclusion: The student housing market continues to attract attention from global investors eager to seize opportunities. The bidding war for Good Host Spaces, driven by investors like Brookfield Asset Management, Actis, and Keppel Land, highlights the immense potential and profitability of the student housing sector. As Goldman Sachs prepares to exit the firm, the outcome of this high-stakes competition will shape the future of Good Host Spaces and the overall landscape of student housing investments.

This is an Article by Raghavendra Kamath, Read the full article here Global Investors in Race for Student Housing Company

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