Despite the scale of private education, the infrastructure serving the sector remains fragmented and under-invested, creating an opportunity for institutional capital, said Anshuman Magazine, chairman and chief executive officer (CEO) for India, Southeast Asia, the Middle East, and Africa at CBRE.
“This is a long-term asset class. The value comes from getting the catchment right and replicating what works. Investors who treat it like a standard commercial play will struggle. Those who build it as a platform will do well,” Magazine said.
He said returns would depend on the quality of operators, location, visibility on admissions, and lease or revenue arrangements.
“We expect developers to partner more with established school operators and international education brands. As these platforms expand across core urban markets and into select Tier-II cities, education real estate could grow into an institutional segment, rather than staying the fragmented, promoter-driven market it largely is today,” he added.
Saurabh Arora, founder and CEO of University Living, a global managed marketplace for student accommodation, said investor interest was likely to be selective, particularly in urban catchments where families valued accessibility, facilities, and consistent educational experiences. He cited Stoicap Ventures’ announcement in August of plans to raise an education infrastructure fund of up to ₹750 crore, targeting rental-generating K-12 school and student housing assets.
Vinod Kakumani, CEO of SchoolServe, which operates the school real estate platform SchoolProp, said some investors were exploring a three-tier structure involving separate property, management, and operating entities.
“The most popular structure for investors in the K-12 segment is to have a developer that owns the land and building and a trust that runs the operations of the school. However, nowadays a three-tier ownership structure is also emerging, where a property company, a management company, and an operating entity exist together,” he said.
Investor interest is growing amid rising demand for private education infrastructure. A CBRE report published in October estimated that India would require an additional 1-1.5 billion square feet of private education infrastructure by 2034-35, driven by rising enrolment, greater private-sector participation, and growing demand for quality education.
The report also found that land requirements for K-12 schools vary widely by location, curriculum, and campus format. Compact urban K-12 schools could require 0.5-3 acres, compared with 5-10 acres or more for suburban and international day-boarding campuses with extensive sports facilities.
Central Board of Secondary Education (CBSE)-affiliated schools generally require 1,600-6,000 square metres of land, depending on the level of the school and its location, along with prescribed playground facilities, the report said.
Dhirendra Mishra, founder and director of LIFE Educare, which operates the school real estate advisory platform School Xchange, said the separation of property ownership and school operations was an established practice, including among CBSE-affiliated institutions. Typically, developers leased land and buildings to trusts for around 15 years, with provisions to extend the arrangement, he said.
Alongside investor interest, limited availability of suitable land in major cities is influencing how school operators expand. Kakumani said demand for premium schools was particularly strong in Bengaluru, Hyderabad, Pune, and the Delhi-National Capital Region, but the availability of land was increasingly constraining new development.
“For example, with a lack of available land in Mumbai, schools are coming up in Navi Mumbai, Thane, etc., to meet the demand. On our portal, we see that the demand for such schools is increasing, but supply is not enough, with very little land for further construction of schools and buildings,” Kakumani said.
He added that international education groups were also scouting for existing schools whose operations they could take over in locations where there was little scope for fresh construction.
Mishra said demand for premium schooling was spreading beyond Tier-I cities into Tier-II and Tier-III markets. “However, developers want to set up schools in Tier-I areas more because that is where the highest school fees are, and developers find it most profitable,” he added.
Larger private school chains and franchises were also increasingly taking over older institutions, including state-board schools, and revamping their operations, he said. He pointed to the expansion of international curricula in India, noting that the country had only seven or eight International Baccalaureate schools in the early 2000s, compared with more than 200 now.
For property investors, leasing campuses can offer long-term rental arrangements with educational institutions while allowing school operators to expand without committing substantial capital to land purchases and construction, Arora said. An established school group seeking to open a second campus, for instance, could find leasing a purpose-built property more practical than purchasing an expensive urban plot.
However, Arora cautioned that the model was not automatically commercially viable or permissible.
“Occupancy and admissions, the strength of the school operator, construction and maintenance costs, renewal terms, fee regulation, and the affordability of rent all matter. CBSE rules also require affiliated schools to operate as a community service and prohibit commercialisation of the school,” he said.
Therefore, the ownership, leasing, and payment arrangements must be carefully reviewed for compliance with applicable laws and affiliation norms. “A commercially sustainable campus allows an institution to maintain educational quality while meeting its obligations over the long term,” Arora concluded.
