Shared spaces: Demand for co-living spaces up again after Covid blip

The demand for co-living spaces is up again after the Covid blip. The focus on community living amid a loneliness epidemic and the opportunity to network have emerged as key selling points.

However, the biggest draw is the lighter hit to the wallet.
 

Renting a 2 BHK in Bengaluru’s Sarjapur Road area, which boasts offices from Infosys to Honeywell, cost about Rs 34,000 a month in the March quarter of this year, according to property consultant Anarock. About a year ago, a similar property was available for about Rs 24,000 a month.
 

Meanwhile, a private room in the same area listed on the co-living platform ZoloStays is priced from Rs 15,700 per month. On NestAway, options start at Rs 20,000 per month. Though specifics may differ, these come with amenities such as WiFi, refrigerators, almirahs, gyms, CCTV surveillance, and more. There are also paid subscriptions to food services.
 

Residents can choose to have separate rooms (shared rooms are available at almost half the price of a private room), while the drawing room and kitchen are common to all residents. Housekeeping is, well, on the house.
 

Buoyed by demand, startups in the space are rolling out expansion plans. Bengaluru-based Zolostays, which currently has 60,000 beds, plans to grow 40-50 per cent year-on-year (Y-o-Y). Its peer, HelloWorld, with 20,000 beds, is looking to add 50,000 more in three years. Settl, which manages 4,000 beds across Bengaluru, Chennai, Hyderabad, and Gurugram, plans to double its bed count.
 

“Our occupancy rates consistently exceed 95 per cent throughout the year, often resulting in pre-bookings upon property launches,” says Abhishek Tripathi, co-founder, Settl. This year, the firm raised Rs 10 crore from Gruhas, the venture capital fund of retail stockbroker Zerodha’s co-founder Nikhil Kamath, and other investors. The company is pinning hopes on a growing economy, rising pay scales, and a greater urge for an “enhanced standard of living” to boost demand.
 

Networking hubs
 

With occupancy rates up again, coliving firms are also promoting their centres as hubs for networking with like-minded individuals. 
 

Some like HelloWorld hold mixers, game nights, sports events and themed parties to help tenants bond. “Additionally, we organise workshops, seminars, and skill-sharing sessions that allow individuals to learn from each other and build professional relationships,” says Jitendra Jagdev, co-founder and chief executive officer (CEO), NestAway and HelloWorld Technologies.

The focus on youngsters makes economic sense. Youngsters contribute to the financial sustainability of coliving spaces as they often represent a sizable portion of the tenant population, says Jagdev.
 

The majority of occupants in co-living spaces are millennials (those born between 1981 and 1996), says Settl’s Tripathi.

“The primary demand for shared accommodation naturally stems from major cities, where individuals relocate for educational and employment opportunities,” he says. “Cities like Bengaluru, Delhi-National Capital Region, Mumbai, Hyderabad, Chennai, and Pune experience particularly high demand for such accommodations.”
 

Creating a niche

To counter the competition from paying guest (PG) accommodations and rental properties, some coliving spaces are homing in on a relatively unexplored slice of the market.
 

Take The Beachhouse Project, which according to its website, offers a series of “invite-only residencies designed and curated for creators, founders… and make-it-happen people”.  
 

It has hosted 85 editions of seven-day meetups since 2014 where people live together and exchange ideas and action plans, learn how to grow or start their business, and “go on a legit brain vacation”. 
 

Others like NomadGao and Urban Nomads cater to digital nomads, or those who can work from anywhere, and offer them “work-ready” homes from mountains (Dharamkot in Dhauladhar Himalayan range, or Laxman Jhula in Rishikesh) to beaches (Anjuna or Morjim in Goa). 
 

Though part of coliving's appeal stems from its affordability quotient, firms like The Covie and Hyphen are creating premium spaces where the monthly fee can give tough competition to a rented alternative. Hyphen’s Sycamore Tree in Bengaluru’s HSR Layout costs Rs 42,999 for a single occupancy unit. A 2 BHK in a similar locality had an average rent of around Rs 45,000-48,000 per month.
 

On the horizon
 

The biggest change that the industry has seen is customers becoming more discerning for quality, says Zolo Co-founder and CEO Nikhil Sikri. 
 

For the companies operating in the space, the thrust is on designing properties to maximise utility, comfort, and profit margins. 

HelloWorld has leveraged technology to drive operational efficiency. It is also aligning all channels to improve acquisition costs, and halting operations in a few cities that were not profitable. Co-founder and CEO Jitendra Jagdev says the firm is “inching towards Rs 200 crore revenue mark, growing at 90 per cent YoY”.
 

Builders, too, are beginning to recognise coliving as a distinct asset class, alongside residential and commercial properties. These coliving units typically range from 200 to 250 square feet and are equipped with attached toilets and kitchenettes. 

To cater to residents' needs, common facilities such as recreational areas, gyms, sports zones, libraries, and lounges are incorporated on designated floors.
 

Coliving firms are also branching out. ZoloStays has introduced pre-leased apartments for retail home investors, selling inventory worth Rs 300 crore last year. It also forayed into the luxury hotel space with its first unit in Bellandur, Bengaluru.

HelloWorld recently unveiled a coliving project in Kota, Rajasthan, with a rental yield of 10 per cent. The firm is also collaborating with developers in Delhi NCR, Pune, and Jaipur to introduce similar coliving ventures.
 

The troika of continued migration towards major cities on the back of a growing economy, youngsters’ choice to remain single for longer, and the rising importance of socialising bodes well for the sector.