Schools add value to townships

WITH RESIDENTIAL units getting pricier than ever, real estate and township developers are looking for a new USP (unique selling proposition). Schools seem to be high on their radar and many of them are planning tie-ups with education-providers. Guaranteed school admission has always been a big draw for property buyers.

While alliances between schools and property developers have been common from the early 1990s, real estate funds and other education-providers have spotted this opportunity now. They are scurrying to get a piece of the action. ‘We want to acquire property and provide intellectual property to the Trust that runs schools’, says Shanatanu Prakash, chief executive officer of Educomp Solutions. Law permit only Trusts to manage schools.

Prakash is targeting about 100 such Educamp-branded schools in three years. The company says it will buy real estate for the school from the developer and also provide the intellectual property for running it .This includes Educomp’s digital content library, training manuals for teachers, lesson plans and books which would guide the Trust in running the schools.

“Without schools, it will be difficult to sell the property within townships” says Pranay Vakil, chairman of Knight Frank India, indicating the potential for the education business. Data from Knight Frank indicates there are around 100 integrated townships in various stages of development across the country. And many developers plan to tie up with more than one education provider. “Depending on the size of the township, we are looking at the possibility of tying up with a number of schools, says Pradeep Jain, chairman of Parshvanath Developers.

The executive director of Shriram Properties, SS Ashokan says that while he is in talks with various institutions, no commercial modalities have been worked out as yet. Branding will be the key aspect in deals between developers and education providers .In Mumbai, examples of such a branding exercise abound .In the early 1990s, the Rahejas got Bombay Scottish to set up shop at their Powai complex. Similarly the Hiranandanis got the principal of Cathedral and Sir John Connon School to head their Powai School. The Hiranandanis also have two schools in Thane Township.

Funds that invest in the real estate sectors are also looking at the education space. “There will be education providers who want to capitalize on this opportunity but they may not have the capital to buy the property”, said the Head of a Real Estate Fund. So while property developers may have already negotiated a number of individual deals, education as a business is set to assume significance within these townships what with the Real Estate Funds set to join the action.

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