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