Adulting is not easy especially when one has to move out from the comforts of home and hometown. Not to mention the tasks like laundry, paying bills, etc. that need to be taken care of which were otherwise didn’t exist at home. What if one can avail the comforts of home without fussing over amenities? Millennial is looking for just the kind of solution and they have found their answer in co-living space.
Co-living place is the type of housing where different people agree to share their living space. Traditionally, students and young working professionals have been using private hostels and paying accommodations until they are able to afford an independent rental or own house.
Lately, private co-living players are pepping up this space like never before with amenities thrown in like laundry, housekeeping, wifi, maintenance, security, in-house activities and other services. Be it the sullen landlords or dealing with gas leak or fused bulbs and fussing over dirty laundry, co-living has wiped out many drawbacks related to PGs.
Rise Of Co-living Segment
The concept of co-living isn’t new. Strangers used to share living spaces in dormitory and PGs since ages but it is only in the past couple of years that co-living has acquired the contours of an industry. Organized co-living space has witnessed a spurt owing to lakhs of migrants coming to metro cities who are looking for a living arrangement that is economical yet safe, up-class and aspirational.
Co-living segment has been bringing in convenience and a lifestyle, along with the sense of community, that is typically associated with a hostel life. A report states that almost 40% of India’s millennial workforce comprises migrants, looking for affordable yet modern living spaces. This number is expected to hit 75% of the total workforce by 2025.
According to Cushman and Wakefield, India’s co-living market size is expected to double by 2025 to $13.92 billion across top 30 cities.
Co-living seems to be a win-win thing for both end users and developers. Owing to the huge gap in demand and supply, the co-living sector is expected to become an exciting asset class for real estate investors. As per a recent report by Prop Tiger, co-living fetches much better yields compared to traditional ways of renting property.
On an average, across India’s top cities, rental yields of co-living spaces can go as high as 8-11 per cent, compared to the average yield of 1-3 percent of residential properties.
No wonder, real estate developers in NCR are venturing into the co-living segment as demand for houses continues to be sluggish. Many developers, especially in NCR, are stuck with residential inventory they cannot sell. These inventories can be furnished accordingly and can be used as co-living space.
The market for co-living in India is evolving at a rapid pace, with investment from national and international investors bringing in much-needed seed capital. Currently, the total listing by organised players is around 2 lakh beds. A single bed generally generates a revenue of Rs 12,000 per month, which translated into a revenue of $407 million (around Rs 2,880 crore) in 2019.
Established Co-living players
- Stanza Living
- Oyo Life
- Zoyo Stays
- Ziffy Homes
- ASF Group
With 150 million urban residents that are poised to add over the next 15 years, India is set to become the trailblazer of co-living segment in Asia-Pacific. The segment is pegged at at around $120 million (Rs. 845 crore). It is set to touch $2 billion by 2022 as it gets formalized and popular.