Unsold inventory has always been a huge problem for developers. Although 2018 saw a slight decline in the inventory, the recent slump has amounted to an accumulation up to huge levels. Well, the good news here is that the rise of co-living is slowly yet steadily helping in easing out this menace.
As per the data by Anarock Property Consultants, unsold inventory as of December 2018 across India’s top seven property markets was 6.73 lakh units. The problem may seem persisting and never-ending, some developers have found a way to tackle it.
It has been observed that Indian developers are now collaborating with co-living companies to tackle the problem of static inventory. Many developers are seen giving out their empty, but ready spaces to co-living companies.
“Co-living provides better use of vacant buildings for an economic trade-off if property owners lease properties to co-living operators for sublease to young students or working professionals,” TOI quoted Vivek Rathi, senior VP, Research, Knight Frank India as saying.
The opportunities in the co-living segment are huge. According to a recent survey, 72 percent of Millenials in the age 18-23 are warming up to the idea of co-living for their dwelling needs.
These kinds of arrangements between developers and co-living providers are usually based on a revenue-sharing basis. In fact, developers report opportunities to earn almost double the yield on a traditional renting model.
Some of the such recent and expected tie-ups are as follows:
Olympia Group + Zolo:
Olympia Group recently tied up with co-living startup Zolo and offered 100 of its apartments in OMR for the same. Ajit Chordia, MD, Olympia Group revealed that 90 percent of these apartments have been occupied.
Chennai-based developer Navin’s is reportedly in advanced stages of talks with undisclosed co-living startups to adopt the model for its unsold residential units. The company estimates the model to yield returns almost ‘100 to 150 times’ the traditional rental routes.
Student housing player Stanza Living is reportedly in talks with a few major developers across Bengaluru and Chennai to rent out their inventory to it to set up student living hubs.