Every business proposition is now driven by the creation of “experience” for consumers. Real estate is not an exception and is now led by a wave of innovations to improve the experience of its occupiers. It is now widely recognised that providing an overall pleasing experience and superlative services are inevitable parts of any real estate offering.
A recent JLL report, Innovation Led Opportunities: Changing India’s Real Estate Landscape, showcases how innovation has driven the rise of new asset classes in the real estate sector. Co-living, which is one of the most pertinent emerging asset classes in India, is gaining popularity with several players entering the segment to capture a share of this enormous opportunity. According to the report, the co-living market in India is expected to grow at a CAGR of 17% over the next five years to reach nearly INR 1 trillion by 2023. Furthermore, co-living penetration is expected to go from the current 2.6% to nearly 8.3% of shared rental market by 2023. Key players operating in the co-living and student housing segments are Zolo Stays, CoHo, OYO Life, NestAway, Colive, Stanza Living, OxfordCaps, Placio, ZiffyHomes and Isthara Parks etc. Some new entrants in this segment are Housr and Hamstede Living (joint venture between Lemon Tree Hotels and Warburg Pincus) among others.
A growing young workforce, changing consumer trends and potential demand are attracting both start-ups and real estate developersto this segment. With today’s consumers placing more emphasis on “experiences” rather than “ownership”, demand for co-living is expected to experience further push and gain more popularity.
The concept of co-living goes beyond just offering rented space as it provides a customised experience to residents. It provides value addition to residents compared to regular paying guest accomodation by offering a better lifestyle, quality of accommodation and upgraded services that are at par with the organised hospitality segment or managed residences
The biggest differentiator in the co-living segment is the emphasis on community-led experiences. Co-living operators are cultivating communities by organising social activity, events and workshops. Regular events, focused on festivals, sports events, music, dance, yoga and aerobics sessions, are organised to engage tenants. Co-living operators also provide apps to smoothen the daily operations of their facility. This not only provides a seamless experience to end-users but also brings in enhanced efficiency and cost optimisation for operators.
Sensing the huge potential in the segment, institutional investors are also funding the co-living operators, thus providing a further push to this already spreading wave of upgraded lifestyle offering. As the concept is gaining popularity, co-living players are leasing entire towers in residential projects and seeking built-to-suit serviced apartments.
It is just the beginning of the co-living wave that is gripping India and is even expected to enter Tier II cities. It is expected to drive India’s rental housing market albeit with some challenges like the absence of a regulatory structure and the lack of suitable real estate options at the right locations and prices.
More on 'Residential' in 'India'
- Hyderabad: an emerging multi-asset real estate powerhouseDecember 9, 2024
- Delhi NCR’s luxury residential market thrives in H1 2024August 30, 2024
- Repositioning Bengaluru’s residential hotspotsAugust 8, 2024
- Pune’s residential market: beyond a retirement havenMay 31, 2024
- Fractional ownership of vacation homes in IndiaApril 30, 2024
