The millennial generation is not only re-defining the way the new India works but also how it cohabits in the society. The contemporary concept of ‘co-living’ is the coming together of young professionals who have settled in Tier I and II cities and aspire to cohabit with culturally and professionally like-minded people in a space defined as a home away from home.
This modern form of housing where residents share living space and a common set of interests, values, and/or intentions, which offers private bedrooms with common shared areas like kitchens and recreational rooms, is developing as a big business opportunity in the fast transforming Indian real estate sector.
The co-living market in India has grown at a phenomenal pace in the last few years and had become 50,000 beds worth business till 2018. This has also led to the venturing of many start-ups foraying into the business which today amounts for US$120 million (INR 845 crore). The organised co-living sector in India has grown over 100 per cent since the last financial year. As per industry reports, the co-living space market has an immense scope in India and will boom like never before in the coming few years.
Evolution of the Concept
Co-living is an evolved form of rental housing solution and is becoming popular with young and unmarried professionals in their 20’s or 30’s who have moved to cities like Pune, Bengaluru, Gurugram and Mumbai. Such spaces ensure interaction as well as privacy from landlords and a relief from the restrictive PG/ hostel environment. It’s a sophisticated lifestyle along with the sweet comfortableness of home.
There are some frontal start-up players investing aggressively in this business who are being heavily backed by investors such as Goldman Sachs, Sequoia Capital, etc. Some developers are coming up with a promising project at BKC in Mumbai with a capacity of 1500 young professionals living in a community environment at an affordable price.
There is a huge scope in the co-living space in India and the market which is worth US$10 billion globally, is expected to propel to US$15 billion by 2020. In times when the realty sector is under financial pressure owing to new government norms, economic slowdown and stagflation, co-living has emerged as a win-win situation for developers as well as consumers.
What Does the Future Hold?
Today’s younger working class wants to skip the hunt for a perfect house and interaction with brokers. All they need is a well-equipped house to stay with like-minded people with least interference from landlords. Besides, buying a house would restrict them to migrate to a different city, if they wish to. The co-living space addresses all these concerns and provides a robust solution to millennials. It is estimated that the rental yields from co-living space will increase by 8-11 per cent in the coming years. Real estate companies can leverage from this trend to bring down the number of unoccupied flats.
As students and professionals move to big cities to study and work, there will be a need for modern, affordable and convenient living spaces that suit the purpose of the millennial population. Thus, the co-living wave is the next big thing and will provide the young student and working force with a home away from home.