Business

Co-living can grow into a $93 bn market in India: report

The realty segment suffers from demand-supply mismatch

The co-living segment, an emerging sector in real estate, has the potential to grow into a $93-billion market in India, a report by PropTiger said.

“The supply by organised players in co-living is currently limited to over one lakh beds. Assuming they earn ₹1.44 lakh per annum per bed, organised players in this segment are currently generating a combined ₹1,440 crore ($206 million),” the report said.

“If the existing demand-supply mismatch is fixed, this segment has the potentially to grow into a $93-billion market,” it added.

Most of the projected demand comes from students studying in different colleges and single working professionals across the county.

In India, there are about 50,000 colleges where over 31 million students study. Out of this, over 12.3 million students are migrants.

As per a survey by PropTiger.com, total occupancy recorded in hostels within college campuses across India was only 3.4 million students, leading to a demand-supply mismatch of 8.9 million students. “This deficit for co-living spaces is currently being met by the unorganised sector, which includes PG accommodation and rental houses,” the report said.

Besides, an estimated over 160 million students enrol for higher education on pan-India level. Out of this, nearly 84% youth is employed.

“In total, India had 37.4 million migrant professionals earning up to ₹10 lakh in 2018 who have completed their higher education between FY12 and FY16.

“A major part of this population is still served by unorganised rental options,” the report said.

“The co-living sector has total untapped demand of approximately 46.3 million beds, out of which 8.9 million is from student housing,” it added.

Ankur Dhawan, chief investment officer, PropTiger.com said, “Through innovation and tech, co-living players have created a completely new segment of rental market in India. This market makes investment in rental housing attractive and gives investor options to focus beyond commercial office and retail spaces.”

“Enormous size of this market is attracting larger players ....and driving up investment in this segment,” he said.

Uttar Pradesh, Maharashtra, Tamil Nadu, Karnataka and Telangana together make up for 48% of the student population enrolled in higher education in 2015-16 that will likely require accommodation near the college campus.

Uttar Pradesh has the highest demand (nearly 19%), followed by 13% demand in Maharashtra. The southern States, Tamil Nadu, Karnataka and Telangana, have the combined demand of 16%, the report said.

“These numbers indicate that developers, who are focusing only on commercial office spaces to expand their rent-generating portfolio, need to seriously think about building spaces for co-living,” the report added.

The co-living segment caters to the students and working professionals. NestAway is a major player in this segment.

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Printable version | Feb 28, 2020 8:58:18 AM | https://www.thehindu.com/business/co-living-can-grow-into-a-93-bn-market-in-india-report/article26231293.ece

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