What co-working is doing to business centres through collaborative and flexible work environment, co-living aims to do to PGs and hostels for students and professionals. The opportunity in co-living sector is the “real estate goldmine” that currently remains mostly untapped but has the potential to scale to $93 billion market, said a study by real estate portal PropTiger.
The study conducted claimed that the supply side, which is the number of beds, with the organised players is just over one lakh beds. “If the existing demand-supply mismatch is fixed, this segment has the potentially to grow into a $93-billion market,” PTI quoted the report.
The demand for beds, on the other hand, stands at around 46.3 million beds, out of which the demand for 8.9 million beds comes from student housing.
Against the demand, the occupancy in hostels based in college campuses is only 3.4 million students. Currently, PGs and rental houses in the unorganized segments caters to this demand deficit.
Co-living and accommodation/housing startups for students and professionals such as RentMyStay, Rentroomi, NestAway, Zolo, etc., manage properties by themselves and standardize them with basic amenities such as housekeeping, laundry, security, meals, etc.
OYO too, last year entered into co-living space with OYO Living with over 2,000 beds in Noida, Gurugram, Bengaluru and Pune.
The report claimed that rent generated through co-living is higher than existing routes of earning rents on properties such as commercial offices.
“A property for students in Sector 125, Noida, is said to give around 8-9% rent whereas housing for professionals is expected to provide 5 7 per cent rental yield,” it said.
Apart from OYO, Ratan Tata-backed NestAway that raised $51 million in March last year, Zolo’s $30 million fundraising last month and Stanza Living that secured $10 million from Sequoia are among the top funded startups in the space.
According to a survey by Knight Frank, a global real estate consultant, more than 70% millennials in India prefers co-living as an option while moving to new cities searching for reasonably priced accommodation.