 "co-living sector, co-living market")
As millennial employees are reshaping rental housing, real estate companies are making a beeline to grab a share of the growing co-living market in India.
Co-living is a type of housing where residents agree to share a living space.
Bengaluru-based Embassy Group has said it would invest around Rs 2,000 crore to build a co-living community in six cities. Puravankara says it is also foraying into the segment by the end of this year.
Called 'Olive', the Embassy Group’s co-living facility will be launched in Bengaluru, Chennai and Pune this year. Followed by expansion in Hyderabad, Mumbai and the Delhi region next year, with an aim of taking the brand abroad as well in time.
“There are 36 million students in higher education and the migrant millennial workforce is growing at a rapid pace across metros. Olive by Embassy aims to uplift the standard of living for this segment, with hospitality services and an eco-system that will support our youth in their academic and professional pursuits. Additionally, our co-living projects will complement and add value to our large tenant base at our Embassy Office Parks,” said Aditya Virwani, operations head at Embassy. Priced at Rs 10,000-20,000 per bed, Olive’s first phase will see the launch of 20,000 beds in all — 15,000s in Bengaluru and 2,500 each in Chennai and Pune.
Puravankara has chosen Goregaon in Mumbai as its foray point into the co-living space, about 350,000 sq ft. “We are in the process of deciding if this is something we should start as a new brand or if a tie-up with an established co-living operator would work better,” says Ashish R Puravankara, managing director.
Another Bengaluru-based realty company, Brigade Enterprises, is also evaluating the co-living sector, as an extension of its housing business. It has, it says so far identified three projects — Brigade Cornerstone Utopia and Brigade El Dorado in Bengaluru, and Brigade Xanadu in Chennai — to foray into co-living. “We are looking at 2,000 beds to start with in these three projects,” says Pavitra Shankar, executive director. According to a Cushman & Wakefield report, this segment is expected to more than double in market size, from $6.6 billion (Rs 47,000 crore) in 2019 to $14 bn in 2025. By recent trends, co-living could also offer a higher rental yield of 8-11 per cent, as compared to the current average of 1-3 per cent in housing property. This is why brands are flocking to this, say experts.
Co-living start-ups such as Oyo Life, The Hello World by Nestaway, Zolo and Guesture are already competing in the segment. And, realty giants are also investing in start-ups here. Lodha Group's chief executive, Abhishek Lodha, and Godrej Properties executive chairman Pirojsha Godrej invested in co-living start-up Housr last year. Bengaluru-based start-up Colive raised $9.2 million from real estate company Salarpuria Sattva.
