A strong, upcoming trend in Indian real estate is the emergence of co-living spaces. Targeting primarily millennials, this market offering the promise of convenience and finding like-minded co-inhabitants, is set to grow and flourish in the country. Thus, it doesn’t come as a surprise that a host of students and young professionals are now escaping landlord-related issues and enjoying hassle-free accommodation under this novel concept. The demand is evidently high, with occupancy rates reaching over 80%.
So let us understand this emerging fad a little better and ascertain how it scores over the traditional concept of living in rented apartments and as ‘paying guests’.
Why this soaring popularity?
- This entire concept involves clean and comfortable community spaces with hygienic food, clear policies and pricing, on-demand services through apps and an atmosphere of bonhomie revolving around a host of group activities. These include anything from movie nights, music and bonfires – all welcome distractions from the mundane academic and professional lives. It thus works out to be a very attractive proposition for the millennials.
- The stipulated monthly rent (the amount depends on whether the room is private or shared) is inclusive of basic amenities like water and electricity. It also entails facilities like meals, housekeeping, laundry as well as the all-important Wi-Fi. Being pet-friendly also works out to be an advantage.
- In some cases, individuals opting for rented places usually have to cough out an advance rental for 10 months or so as security deposit. Here, the security deposits are relatively low and thus far more affordable.
- Under this concept, the inhabitants face fewer rules and regulations with respect to timing, food or allowing visitors to their rooms (which is often a big “issue” when it comes to rented accommodation or while living in PG’s).
- It follows a plug-and-play format with far more flexible terms of exit and choices in comparison to traditional rented apartments.
What the future holds
The co-living market has been evolving at a rapid pace, with newer formats coming into play continuously. The promoters of this new trend have been receiving the support of national and international investors since there is so much untapped potential in this segment.
The post-pandemic times, still dominated by social distancing norms, will witness factors like cleanliness and hygiene becoming very relevant in this sector – creating an opportunity for the organized players to leverage their strength areas. It will call for more stringent hygiene practices like frequent building disinfection and sanitization of high-touch surfaces. However, since these will spike up costs for the operators, and with pressure on rentals, margins may be impacted in the short-term.
For millennials, of course, it will continue to be an affordable, convenient and safe option to stay in a new city. Experts in the trade reckon the sector has the potential to grow over four times in the next decade or so, both in Tier-1 and Tier-II markets. The trend is expected to evolve at a rapid pace on the back of investments from global investors who will infuse the much-needed capital to bolster efficient business models.