Structuring a ₹6.3 Cr Commercial Lease for Scalable Student Housing in Jayanagar

Client

Mojo Campus (by Master Campus Pvt Ltd), led by Divyansh Pitta

Location

Jayanagar 4th T Block

The Opportunity

A 21,000 sq.ft, 5-floor commercial building was identified in one of Bengaluru’s most established micro-markets. The asset had the potential to be transformed into a premium student housing campus, but came with a significant financial commitment.

The lease was structured at a starting annual rent of ₹1.14 Cr, with a 5-year tenure and 5% annual escalation, making it a ₹6.3 Cr long-term commitment.

The Challenge

This was not just a real estate transaction — it was a high-stakes financial decision.

The landlord required full advance payment, creating immediate capital pressure and an 8% annual opportunity cost on locked-in funds. At the same time, the escalating rent meant the operator had to ensure profitability not just in year one, but consistently across all five years.

The core challenge was clear:

How do you convert a high-cost asset into a sustainably profitable business over a 5-year horizon?

KAZIA’s Approach

We approached this as a financially engineered real estate strategy, not a standard lease closure.

First, we mapped the entire 5-year rental trajectory, where the rent would grow from ₹1.14 Cr in year one to approximately ₹1.38 Cr by year five. This allowed us to clearly understand the true financial exposure, rather than just the headline rent.

We then built a forward-looking revenue model, aligning occupancy levels, per-bed pricing, and demand potential in Jayanagar. Instead of treating escalation as a risk, we positioned it as a manageable variable, provided the asset was operated with the right pricing and positioning strategy.

The advance payment, initially a constraint, was strategically evaluated against the 8% cost of capital, and integrated into the overall deal structuring. This ensured that the effective rental burden remained optimized over time.

Most importantly, we positioned the property not as a standard student accommodation, but as a premium campus offering, enabling stronger pricing power and higher tenant retention.

Execution

KAZIA secured the entire 21,000 sq.ft building across all 5 floors, ensuring full operational control for the client.

The deal was carefully aligned across three critical dimensions:

• Landlord expectations on advance and rental

• Operator’s profitability thresholds

• Long-term scalability of the student housing model

The transaction was successfully closed within a competitive market environment, without compromising on financial viability.

The Outcome

What began as a high-cost lease commitment was transformed into a structured, scalable business opportunity.

Over a 5-year period, the deal represents a ₹6.3 Cr commercial engagement, with rent increasing steadily yet predictably. Through strategic planning, this escalation was absorbed and aligned with projected revenue growth.

The client secured a flagship asset in a prime Bengaluru location, with the ability to drive consistent occupancy and premium pricing.

Strategic Impact

This case demonstrates KAZIA’s core strength:

Turning complex, high-value leases into financially viable, long-term business models.

By combining market intelligence, financial modeling, and strategic positioning, we ensured that the asset delivers not just space — but sustained profitability.