With the Covid-19 scare hovering above our world, most businesses have come to a standstill. There is immense pressure on the business to take care of the costs of costs, survive, and emerge from this pandemic. The expectation from the end of the unprecedented time is the world we see, and the businesses around us will go through a change.
“In India, millennials account for a 47%, approximately share in the country''s working-age population, they are an integral target group for coliving spaces. With 60% of the students being outstation students, the demand at present stands approximately 100,000 beds across the country for student accommodation. Coliving space in India enjoys a worth of 85 Cr INR, approximately. This accounts for 2.5% of the entire rental market and going by the industry expectation, and the forecast stands at 2X growth in three years.”, says Kishore Kumar, Partner at Bluebay Realty.
Before the coronavirus outbreak, government policies were not in place, and shared accommodation, most paying guest (PG) facilities were running without definitions. Once the news of Covid-19 took everyone by surprise, the landlords who run PG owners, without giving further notice, asked their tenants to vacate the space with immediate effect. The reflex from these landlords was a knee jerk reaction and unfortunate. During such time, people are supposed to be united, but sadly the reality is far distant. However, this could be a boon to the coliving industry, which will see working millennials and students opt for a professionally led and managed accommodation. The coliving operators catering to both working professionals and student housing will see a surge in demand post the Covid-19 days for two reasons. They have firm policies towards the safety and hygiene, and hands out a contract to live by – something that was missing in the paying guest format. Safety and hygiene environment will be the critical outlook for the renting of shared accommodations.
Some of the organized players continue to run the space with the booking of 85% of accommodation of total beds, though there is 20%-30% of physical presence. Rest have left to their hometown before lockdown announcement to be with their family. Experts, observing the industry, forecast it to revive post-Covid-19 days. With Indian residential real estate stuck in a vicious loop of increasing price and lack of demand for buying, huge inventories are set to hit the developers. Further, the floating population of the millennial workforce in urban areas and metros have turned options beyond traditional renting or owning, something that was a far-fetched notion for many young workers of earlier generations. This will be an alternate asset class that will snowball to act as a bridge. Thus, coliving will become a trend among the rising young workforce for tech companies and start-ups in metros and will continue to grow after the lockdown is lifted
There may be a temporary blip in fundraising. It is because of the primary reason that many will try to see how the industry or SOP or economic feasibility changes. We, as industry players, foresee this uncertainty to last almost a few months till the new demand or expectation of the students and millennials is understood and incorporated. In the long run, shared accommodation spaces will emerge and become an organized sector, thus have a positive impact on raising capital. We anticipate that whilst coliving will continue to strive in metropolitan cities like Bangalore, Pune, Delhi NCR, Hyderabad, and Chennai, which will continue to feed coliving & student housing. Student housing will see establishments in Tier-2 cities, as well as new universities, which are establishing in these markets. The predominantly lease-and-operate model will be of interest to these operators than the asset-heavy model.
Operators will focus more on built-to-suit projects with legal compliances fulfilled, and the design will focus more on creating a clean, hygienic, and equipped - work from home kind of an environment. The operational SOP will have to change to accommodate these changes, and also SOP to integrate interaction with Government / Hospitals and Law enforcement will have to be created.
Overall, Coliving & Student housing will emerge stronger than before with definite potential to double the market size by 2025. While this pandemic and the temporary slowdown of business are hitting the industry in its nascent stage, the change will be positive, and this too shall pass.
Author''s Bio: Kishore Kumar, Partner – Bluebay Realty
Name - Kishore Kumar
Email id - email@example.com
URL - https://www.bluebayrealty.in/
Kishore Kumar, Partner at BlueBay Realty, has overall 18 years of experience. Before starting his venture, he was associated with JLL as Senior Director heading Alternative Business & Private Wealth Group for Karnataka. Significantly, he gained hands-on experience in Retail & Leisure services in JLL for both Karnataka and Kerala market. Before joining JLL he was working in Dunkin Donuts as Business Development Head - South. BlueBay Realty is effective from March 31, 2020. PWR