Targeted primarily at millennials, the co-living market, with its promise of convenience and finding your tribe, is set to grow in India
Staying in a hostel while travelling has its benefits: apart from the relatively low room charges, there is a relaxed vibe and you meet like-minded people from around the world with whom you can bond over board games and pub crawls.
Now, what if you can do all of this back home?
Targeted at millennials, co-living offers community spaces with monthly rents (starting from about ₹7500 up to ₹30,000 depending on whether it is a shared or private room) that are inclusive of utilities (water and electricity) and amenities (WiFi, housekeeping, meal services).
The security deposits are low; there is freedom from restrictions that bind tenants in traditional PGs and apartments, and there is promise of a sense of community through shared experiences.
“There is a need today to create an environment of like-minded individuals who would rather not be alone,” says Moonis Ali, co-founder of Living Quarter, a co-living company with five properties in Hyderabad. “The only thing we will look back on after years of staying in a different city is, ‘Who are the friends I made? What are the experiences I had with them?’. We also wanted to create a good balance between privacy and social life,” he adds.
Living Quarter is a smaller player in a burgeoning market that consists of firms like Zolo, Stanza Living and Oyo Life. A new addition is by Olive by Embassy, the co-living and student housing brand by the Embassy Group, which recently launched its asset-light model, Olive Residences. The first property, comprising 32 one BHK residences in Koramangala, Bengaluru, is currently at 60% occupancy. Two more properties on Magrath Road and in Indiranagar in the same city will be ready in the next three months.
“I would classify co-living into different segments: traditional hostels and PGs that also call themselves co-living, the pan-India players backed by venture capitalists, and boutique spaces that run in a few locations and have their own local brand,” Moonis adds.
Christie Caldwell, who was a consultant for a Pune-based co-living company launched earlier this year, says that her market research involved speaking to owners of co-living spaces both in India and abroad. It became evident that there was a “desire to address urban isolation” among people. “I asked people why they were moving into a co-living space. One of the first things they mentioned was food quality. A lot of single people also said they struggled to get an apartment, so they wanted a space where they could be around like-minded people and not be judged, come in late and have a social life,” says Christie.
For instance, 27-year-old Dr Vikram G K Bhat, an orthopaedic surgical resident at Victoria Hospital, Bengaluru, initially opted to stay at The Hub — a Bengaluru-based co-living space that has four properties to its name — only for a month “until I could find an apartment”. However, the space has since grown on him, and he has now been an occupant for the last two-and-a-half years.
- According to Anindya Dutta, MD and co-founder of Stanza Living, “Professional managed accommodation in India is a $20 billion opportunity where demand far outstrips supply. The market is evolving at a rapid pace with investments from marquee global investors bringing in much-needed capital to back strong business models. We believe the sector has potential to grow over four times in the next decade.”
- With Stanza Living expanding into tier-II markets like Visakhapatnam and Udupi, Anindya adds, “Professional managed accommodation for students and working professionals is a concept that is growing in popularity across tier-1 and tier-II markets, with more cities emerging as higher education and professional hubs that attract high migrant footfalls. Bengaluru has been one of our fastest growing markets and commands the highest market share for us today. Over the last year, we have also grown operations in Chennai and are seeing record pre-bookings for the city. We expect Chennai to be among our top three cities in the near future.”
“There are several positives. Spotless rooms, friendly staff and basic facilities such as TV, AC, refrigerator and washing machine are provided. Plus, The Hub is pet friendly,” says Dr Vikram. He adds, “But I think the most important aspect is the community. It is amazing to unwind with other members after a hectic day at work. You come across people of varied age groups in such a setting.”
Underscoring the importance of community, video producer Shibu Narayan (22), who was employed by Zolo and lived in the company’s ‘standard’ property in Bengaluru for about eight months in 2018, says: “ I wanted to connect with people. But, that particular space didn’t have events and activities. It was missing that sense of community.”
He adds, “I used to travel for assignments. When I went to Chennai, I found that a lot of interesting things were happening there more than in Bengaluru. In fact, my manager used to tell me that the aim was to take the word ‘PG’ which is a very old word and rebrand it as co-living. So, in Chennai, the properties don’t look like regular PGs. Plus, the rates were lower in Chennai compared with Bengaluru.”
While group events were likely to have been an everyday affair in these spaces, the pandemic played spoilsport. Azaan Sait, Chief Happiness Officer at The Hub, says that they are no longer holding community events; a huge change considering how they held over 350 events in the four years prior to the pandemic outbreak. “But it is tricky to say, ‘No, you cannot interact’ to our members. So, we are doing digital events, Instagram Lives and using our WhatsApp groups to create opportunities of interaction between people,” he says. Azaan adds they are now completely flexible with deposits, notice period and minimum period of stay.
Kahraman Yigit, co-founder and CEO, Olive by Embassy, foresees a flurry of investment from global private equity players in the Indian co-living market space within the next five years. “We are seeing a lot of investors and large private equity players who have really big mandates go [in] for student housing and co-living. With that kind of capital infusion, we will see institutionalisation of this sector in a very quick manner. The reason why people are renting on a sharing basis is because the sharing economy makes sense,” he says.