“The rising demand for shared renting will propel the market and offer a business opportunity of Rs 1 trillion by 2023 along with the capacity of 5.7 million beds from the previous levels of Rs 458 billion and 3.6 million beds in 2018,” revealed the Co-Living - Reshaping Rental Housing in India.
According to the second report, Co-Working - Reshaping Indian Workplaces, the demand from corporates, start-ups and entrepreneurs has resulted in a huge jump in the co-working space with regards to total office leasing. The share has risen to 12 per cent in the first quarter (January-March) of 2019 from eight per cent level seen in 2018, it added. 6.9 million square feet of cumulative space has been absorbed by co-working segment from 2017 to first quarter of 2019.
Sanjay Dutt, Chairman, FICCI Real Estate Committee & MD & CEO, Tata Realty and Infrastructure Ltd said, “Today millennials constitute a majority of India’s workforce. They are adaptive but expect a drastic change to occur in the way people work. Agile workplaces and a vibrant ambience helps the new workforce deliver better. While the concept has readily been accepted in the metros, Tier II cities are also opening up to this new concept, including Indore, Ahmedabad, Bhubaneshwar, Kochi and Jaipur.”
Juggy Marwaha, Executive Managing Director, JLL India said, “Co-working segment has come a long way in the country and is now riding a maturity curve and getting more established. Operators within this mature market now offer multiple formats to occupiers. These range from entire buildings dedicated to co-working spaces to built-to-suit co-working offices within the conventional workplaces. With the benefits of cost reduction and shared amenities, the segment provides a tremendous business potential to all – developers and occupiers.”
Samantak Das, Chief Economist and Head of Research & REIS, JLL India, said, “The shift in perception amongst millennials to ‘sharing’ instead of ‘owning’ has made the co-living concept popular. For all groups - corporate occupiers, start-ups, entrepreneurs and millennials – renting offers flexibility and savings. Co-working offers cost savings of 20-25 per cent compared to traditional office space leasing. Co-living offers attractive returns; 2-4 times higher than traditional residential yield of 2-3 per cent.”
“With these two innovative segments, Indian office and residential real estate is sure to grow bigger and better. However, stakeholders need to address existing challenges such as issues related to data privacy, the conservative approach of property owners and relevant supply observed across co-working and co-living, respectively,” added Das.
Vijay Rajagopalan, Head – Alternatives Business, JLL India said, “ Factors such as affordability, convenience and community-led living will drive the segment’s growth. While supply is still a challenge, the demand has made the market fascinating for organised operators, owners/landlords and private equity investors.”