Optimization of Capital Structure for Student Housing through the Public–Private Partnership Model in Higher Educational Institutions

Abstract

Abstract The public–private partnership (PPP) model can serve as a sustainable mechanism to bridge the funding deficit in higher educational institutions (HEIs). Profitability remains a primary objective that compels private partners to bear the risks inherent in this model. This study formulates an optimal PPP capital structure for student housing in Indian HEIs using the ant colony optimization (ACO) algorithm. A multiobjective model balancing private profitability, student affordability, and public funding was validated through a case study at Indian Institute of Technology (IIT) Madras. The optimal solution, achieved at a 60% viability gap funding (VGF) level, a 5.55% loan rate, and a rent of USD 852, yielded an equity internal rate of return (EIRR) of 11.03%. The Pareto-front analysis further identified alternative optimal capital structures. Of the 41 feasible solutions, 23 were identified as Pareto-optimal, providing stakeholders with the flexibility to adopt the most suitable capital structure for each project. The nondominated solution set included alternatives with 80% and 60% viability gap funding at a 5.55% loan rate. The findings suggest that PPP-based student housing is financially viable and policy-ready. Student housing in India is a promising emerging real estate sector characterized by low risk, rising enrollment, and stable income streams.

The authors' abstract, as published at the source. Journal of Construction Engineering and Management, 2026 · DOI ↗