Ahmedabad realtors turn to education for profits

Sensing that the downturn in the real estate business is here to stay for some time, a number of city-based developers are turning to the education industry to earn the big profits they used to earn as realtors.

The shift of interest is so pronounced that sources in the real estate sector expect as much 2,000 acres of land in Ahmedabad with almost 2 crore sq feet of construction, to be occupied by education-related businesses.

Ritesh Hada, director of United World School of Business, had earlier investments in the real estate business as well, but he has now restricted his activities almost completely to the education industry. He is launching an MBA institute at Gurukul, near Drive-in road, and at two other places — Mumbai and Kolkata — simultaneously.

Explaining his limiting himself to the education sector, Hada said that thousands of students of the state migrate to metros or foreign countries every year for higher education. “We realised that there is a need for more institutions for higher education,” he said. “Hence, we decided to use our ongoing real estate projects to house new education institutes.”

Hada said that his experience in the education industry had convinced him that institutions that offered an MBA degree with practical exposure were urgently needed. He said that the institute that he plans to open would have state-of-the-art facilities and faculty from IIM-A.

Senior officials of different industries will share their practical experience with students, Hada said.

Sources said that, besides developers from the city, some national and international players were also investing to set up new institutes, schools, colleges and education parks in the state. These players believe that most of the new educational institutions will come up in or around Ahmedabad, followed by Vadodara and Surat. As availability of land and infrastructure are vital for any educational institution, joint ventures with realtors are proving to be an easy way to success.

Established names in education such as Globysn, Proton, and Amity have entered the Ahmedabad market recently. Vijay Shah, CMD of M/s Vijay Shah said that there is a big demand for such institutes as is evident from the many students who migrated to other cities every year for higher education.

“If developers can persuade renowned and branded institutes from abroad to set up shop in the city, students will not leave Gujarat for higher studies,” Shah said.

“Education is going to be one of the most profitable sectors in the days to come.”
Holding similar views as Shah, the director of RESMA (Real Estate Studies and Management Academy), NK Patel, said that, in the real estate business, there is a market cycle of four to five years. “Once the cycle is complete, the market experiences a slump,” he said “It is during these times that sectors such as education (which is becoming costlier every year) can provide a regular source of income.”

Patel further said that, in Ahmedabad itself, there are around 8-10 developers who are offering the premises of the buildings they have constructed to people to open schools, colleges and other education-related businesses. “These developers take a share in the earnings,” he said.

The biggest problem for realtors planning to open educational institutes on the premises of their buildings is availability of highly-qualified faculty members. “There is no doubt that we are in need of more educational institutions,” said NB Vasani, vice-chancellor of Nirma University.

“But it is equally  important to maintain the quality of education. For this reason, many more highly qualified teachers are needed if the upcoming institutes are to impart high-quality education.”