By James Mathew
New residential trend of co-living is spreading across more cities such as Jaipur, Mathura and Lucknow
Co-living is fast emerging as the new lifestyle for young Indians, especially with the burgeoning professionals and student populations across various metros and big cities in India.
The rising demand for co-living is also leading to this segment being billed as the new big opportunity in realty sector, with several organized players already jumping into the fray to come up with different models of co-living space offerings, according to research agencies and players in the residential realty market.
The new shared-living trend, offering private bedrooms with access to common shared areas like the kitchen and living room and amenities such as wi-fi and washing machines, which have so far remained more a big city phenomenon, has started spreading to more and more tier 2 cities in India such as Jaipur, Mathura and Lucknow.
“Co-living as a concept go along with the co-working concept and now some of the promoters of co-working spaces are already getting into or planning to get into the business of offering co-living spaces as well,’ Dr Surabhi Arora, Associate Director of Colliers International, told Arabian Business.
There is a lot of synergy between co-working and co-living as businesses and hence it makes great sense for the promoters of co-working spaces to get into co-living spaces as well, she said.
We Work and Co Work are among the leading players in developing co-working offices. The rising popularity and demand for co-work office spaces have seen many more new players such as iKeva, Innov8 and 91Springboard getting into this segment.
The organized players in co-living business segment take several apartments on long-term leases, renovate them to convert it into a co-living spaces with added amenities such as wi-fi, washing machines and appoint a caretaker for managing the units.
Oyo Living, NestAway, CoHo Living, Ziffyhomes, stayAbode, Placio and rentmystay are among the organized players in this segment, some of which are also being backed by big investors such as Goldman Sachs and Sequoia Capital.
Surabhi said while mostly young professionals and students who work or study outside their states are the ones who seek for co-living accommodations, of late even senior professionals, who are working in offices which are 25-40 kms away from their houses in the same city or adjacent cities like Delhi-Gurgaon or Delhi-Noida, started opting for staying in co-living apartments near to their offices during the week days and going home to stay with their families on weekends.
"This helps them to save a lot on commuting time and dealing with the haphazards of unruly traffic in cities like Delhi," Surabhi said.
Delhi and NCR cities like Gurgaon and Noida, Bangalore, Mumbai and Pune are among the Indian cities where there is maximum demand for co-living spaces.
Such spaces offer convenience and an entirely new lifestyle for young professionals – most often bachelors and singles - who are not keen to change cities because of their work. Besides, universities also tie-ups with entities offering co-living spaces to facilitate stay for their students.
‘Though we do not have any data on this yet, but current trends indicate that this new accommodation is increasingly getting more popular with the young and unmarried millennials in India, aged between 20-30 years,’ Anuj Puri, Chairman, Anarock Property Consultants, told Arabian Business.
Anuj Puri said though co-living is still a niche segment in Indian rental housing, going by the recent trends, co-living may offer a higher rental yield of as much as 8-11 percent, as compared to the current average yield of 1-3 percent in residential properties.
‘This fact is definitely paving the way for a new asset class in real estate investing. Interestingly, co-living spaces could also bring down the consumer's average cost of living by as much as 10-15 percent with optimal real estate utilization and economies of scale,” he said.
The overall market share of rental housing in India is estimated to be between 35-45 percent of the total residential market.
Industry observers, however, said how issues related to safety and similar related aspects in co-living apartments are addressed or taken care of by promoters will determine the growth of this segment in future.
In fact, the demand for co-living space has come up in India mainly because of reluctance on the part of apartment owners to rent out their spaces to bachelors and students across various cities on account of safety and other issues.