Co-living becoming the next biggest wave in the real estate sector

ABSTRACT:

    The pandemic of 2020 has a huge impact on the real estate market of the country. The trends and demands are likely to fluctuate post pandemic. The drastic impact is seen on the demand for co-living spaces and student housing in the nation. The concept of social distancing and work from home have eventually made people to have their own living space.  Co-living offers a better lifestyle and standardized facilities to the tenants. It is not like the traditional rental models of PG and Hostels rather is professionally operated as a business.  The investment in co-living is expected to shoot in no time by the real estate investors. The rental yield earned and return on investment from the rental accommodation is quite high than the actual residential projects. There are various factors which makes it clear for the future scope of student housing in India. The core attraction for the co living are from the young student since it provides a healthy ambiance, like minded co-residents with all necessary amenities.

INTRODUCTION:

    Co-living is a contemporary from of housing where the residents along with sharing the common living spaces, also share their set of interests, opinions and views and their intentions. It is a new approach for the millennial generation that focuses on independence, collaboration, social networking, and sharing economy.

    In the latest trends, the co-living and student housing are going to elaborate the real estate industry by focusing on the targeted markets in all educational demanding spots like Mumbai, Ahmedabad, NCR, Pune etc. The provision of basic facilities is the bottom-line role of the co living provider, but nowadays, a very high standardized facilities are being provided by the co living provider to the tenants. The safety and security are becoming tight and initiates in providing a good environment to the student or the working people. So, looking forward to student housing in the future it will witness a huge and tremendous growth in the reals estate market. All the real estate properties are tying up with co-living brands to provide and design properties to meet the needs and demands of the market. Especially, for students, it will cater to all their needs and built up accommodation. The co living culture give a very user-friendly experience to the residents. The providers are persistently making extra efforts and designing the co living segment to provide more advanced amenities to the co living.


How co living spaces are different from the traditional rental models

    Traditional rental accommodations and todays co living, are two forms of sharing houses, which allows people to stay together for a particular period of time. There is a vast difference in the standard of living and perks of co living and traditional rental accommodations. Paying guest accommodation (PG), hostel accommodation, and co living spaces are the most cost-friendly choices of home away from home for those who tend to stay for a definite period of time. But the three are accommodated distinctly for different purposes and thus have distinct operations and setups from one another.PG and co living are more analogous to the extensively equipped and furnished rental spaces but vastly differ in terms of the amenities , facilities and perks they offer. This is because, in case of PG, the owner of the house rents out a room to their guest within their home only. Rather co living is operated by businesses who rent out rooms within entire units to the like-minded residents who value resource sharing and communal living. Co living spaces are generally managed and operated by businesses that offer professional services and host community gatherings and events. Hostels are more of a middle ground between hotels and dorm rooms. They often provide bunks within shared rooms and the people who stay there have access to shared bathrooms and communal spaces. Co living spaces are at its best when used for a coworking area inside the unit only. They are society centric places. Hostels are also a great place to meet new friends, but the time you have with them is often short-lived.  PG makes sense if you already have a community at work or school and truly only need a place to sleep.PG is more like a traditional lease with roommates that you may or may not interact with often. There are various perks of co living which involves the aid of cost- saving since it provides the spaces for both shared and private rooms. Secondly, it enhances the involvement with the community as well. Since the whole operation of co living is being managed by a business, rather than individuals, there are incredible perks of co living. The security is very high in the co living segment.

Role of Co living /Student Housing in the real estate market

    Co living spaces plays quite a big role in earning the rental yield in the current real estate industry. It has become huge profit-making investment, which is attracting a lot of real estate developers investors. The market gap and upcoming reports and projects highlight that student housing accommodation is going to be the next big real estate asset. It will be a large chunk of demand by not only students also by working professionals in the next 10 years. Especially for the students of India, who migrate more often for jobs and education purposes, look for housing options which gives them a comfortable living with all the facilities at affordable rates. There are various factors which makes it clear for the future scope of student housing in India. The core attraction for the co living are from the young student since it provides a healthy ambiance, like minded co-residents with all necessary amenities.

Effect of pandemic on the demand of co-living

    Many Real Estate firms and their CEO’s have presumed in their reports that because of the pandemic, there are very rare chances of increment of the rentals, but it completely depends on the consumer’s choice. After this pandemic, because of obvious reasons the consumers demand for the safety and hygiene standards, the demand for student housing might increase by 20-30%. According to Uday Lakkar, founder and CEO, of CoHo, there will be a downward slip of co living in a short term, because of low occupancy and demand in the market. In later terms, after four to six months there will an upward trend in the market of co living spaces. There is a high scepticism of sustainability of the co living in this new normal scenario. But it is presumed that high partnerships would enter this sector post pandemic or release of the vaccine in the country. Cleanliness and hygiene now have become the ‘must haves’ in the co living segment which people. It involves a big level investment from the operators, to bring the demand back into the market.  This may include improvements in quality and building infrastructure, offering flexibility vis-a-via payments, and offering a comfortable place and environment to live in. In the new normal, the people’s preferences of sharing a room would change. People would prefer to stay in a separated room irrespective of its size. due to social distancing and privacy. So, the facilities will have to be ready for it.” Anand adds that work-from-home would still mean that people would prefer to stay in proximity to the office and the demand may come from consumers who are looking for options that are work-from-home-compliant

Co living becoming a wave in the real estate sector

    The time is not far when co living will become a wave in the real estate sector of India. According to the data collected from NoBroker.com, to maintain the social distancing and ensure the health safety, around 36.2% people are looking forward to shift to the shared houses from PG’s. Simultaneously, 33.7 % people have expressed their preference to move to co living apartments for the better lifestyle and stand of living. As many as 16.3 percent have also cited that they are looking for premium PG’s. Social distancing is one of the reason for the change in the demand shift. From the survey, 29.8% people decided to shift to co living because of social distancing. There are other reasons as well where 21.5%people decided to shift due to work from home, 16.1% due to inability to find to find the immediate accommodations.

    Many real estate companies have witnessed  that there is big paradox in the market,  where in one hand there is a big amount of unsold inventory from the developers with no buyers while simultaneously there is a boom in new development where BTS(Built To Suit) units will cate to the co living ecosystem. Also, Ernst and Young says in its report that student housing/co living segment would consolidate in coming few months.  It might result with sustainable financial and operational models. Despite such a slump in the real estate industry, the investors and developers are keen to invest in the co-living, student housing and senior housing. Although the real estate industry is crashed but co living and student housing accommodation have become one of the attraction for the investors and the developers. According to Pwc, in India, it is expected that the co-living and student housing are would attract an investment of 700million USD with the addition of 6 lakh beds in the next two years. It has also been calculated that co-living, student housing and coworking would earn the rental yields of 7-11%, whereas the traditional housing formats in India earn the average rental yield of 3%. Co-living, student housing and senior living would become next transformative step in the residential real estate domain, although coworking has been evolved from traditional office real estate. Across the globe, many millennials have acknowledged the popularity of co living without hesitation. According to JLL, the co-living sector in India is all set to take the first position in the Asia-Pacific region.  The major aim of the handlers behind this evolution is to change the dynamic of the society, enable a high start-up environment, waving the interest in the higher education by the migratory student population and the need for quality housing solutions for senior citizens. There are few Indian startups who are prominent operators for the co living in the country. Some of them are Nestaway, CoHo, Stanza Living, Zolo Stay, Homigo, Youthville, OYO Life, Yourspace and CoLive. Currently, the top six co-living operators have 1.18 lakh beds and 13 noted student accommodation providers have 1.5 lakh beds across the country. Residential developers are striving to seize any opportunity to collaborate with the co-living operators in order to leverage the unsold inventory.

REFERENCES:

1) Ajoke Basirat Akinola, A. K. (2020). Health equity for internal migrant labourers in India: an ethical perspective. Indian Journal of Medical Ethics.

2) India, M. o. (n.d.). Policy, Strategy and Operational Plan.

3) Living, T. Z. (2019). Coliving & Student housing in India: The future scope.

4) RAJAN, S. I. (2020). The way forward on migrant issues. MIGRANT ISSUES.

5) Yards, S. (2020). Co-living & Student Housing: The next Movers and Shakers of Residential Real Estate.

By Nehmat KhoslaNehmat Khosla is a qualified urban planner and a Housing specialist. She is from Amritsar , Punjab. She has keen interest in researching about the urban planning related problems and finding solutions to them. She has a deep understanding of urban planning 

 

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