Co-living in India

Rohan Saneja
3/13/2020
Introduction
Coliving as a concept isn’t new per se. We have seen manifestations of the same either through
‘flat-sharing’ concepts which have been popular with singles through the world, or informal ‘paying
guest’ accommodation option seen in many developing countries. What we are seeing is
formalization of this unorganized industry. We estimate the presence of nearly 400 coliving
operators across the world today, which is up from about 150 operators in 2016. That’s a dramatic
increase! What’s also heartening to see is the emergence of coliving at a global level - and not
merely restricted to certain geographies.

What is Coliving?
Coliving is the cohabitation of people with access to private or shared rooms for living, with access
to shared amenities like kitchen, living rooms, etc. leading to a community lead living. An operator,
typically, gets into a contract with property owners (or developers) and converts their dwelling into
a coliving facility. This transformation includes design of the space based on the principles of human
interaction, construction or renovation as the case maybe, addition of appropriate furniture, etc.
Once the space is ready, the operator manages the complete lifecycle of the facility including
marketing and tenant identification, rent collection, property maintenance and management,
organizing community events, addressing any complaints and concerns of both the property owner
and tenants.

The basic concept is hardly new. The ‘boarding houses’ of a 1940s New York City or London housed
single working professionals in much the same way that the ‘mess houses’ of Calcutta or ‘PG’
accommodations of Bombay did during the same years. What has changed today, however, is the
emergence of purpose built co-living spaces constructed and/or managed by professional firms who
increasingly perceive opportunity and healthy returns on their business investment.

India has become the torchbearer in the ‘co-living’ space with several players looking to grab a share
of the burgeoning opportunity. The ‘co-living’ market in the country is expected to grow at a CAGR
of 17% in the next five years to touch nearly INR 1-trillion by 2024

The operator is the hero of the coliving eco-system.

Other key stakeholders include:

• Landlords
• Tenants
• Consultants
• Technology providers

2 Important aspects of Coliving

• Advantages for landlord: Higher yields of 8-10% in many countries

• Advantages for tenants: Ready to move in space, access to community of like-minded
individuals, quality accommodation
Characteristics of Co-Living
• Tech-driven easy living – Technology is a prerequisite for today’s young adults to manage
their lifestyle. It has revolutionised the way digital nomads work, live and play. Co-living
operators use modern technology to develop mobile apps which create an online platform,
giving the residents access and flexibility and smoothens communication between the
tenant and operator. The residents can provide feedback or complaints and ask for services
like housekeeping through these apps.
• Privacy amidst communality - A niche within a niche - Co-living spaces draw a thin line
between living together but differently. Such service providers supply wider infrastructure
of civic participation, community enterprise and the sharing economy. A lot of community-
focused social events are organised to improve the social engagement between residents.
Many co-living operators organise community-led events such as yoga classes, barbecue
nights, laughter mashups, story-telling events and pizza nights for the modern-day city
dwellers.
• ‘No strings attached’ accommodation - Co-living spaces are ideal for anyone on a non-fixed
asset model; people who are looking for complete flexibility and homes that are fully
furnished, serviced and managed. These usually operate on a plug-and-play model that
saves tenants the hassle of dealing with everyday household chores and also from the
burden of paying frequent utility bills. The monthly rent usually includes a host of facilities
and utilities like – TV, housekeeping, Wi-Fi, cable, common kitchen and laundry spaces,
maintenance and all the furnishings. With no lease contracts, the residents have the
flexibility to stay for as long as they need and as their work demands.
• Co-living’s economics for millennials – With a very vast globalised workforce, today’s
millennials are travelling and relocating very frequently, due to which they are looking to
cut back on costs. The rentals charged by these co-living spaces are usually inclusive of all
added facilities and yet affordable for the average young professional. The lock-in periods
for co-living spaces usually vary from two to six months and the refundable security deposit
for such short-term lease options are only two to three months of rent.
India
India’s urban housing pyramid is a skewed one with the biggest proportion of the population base
being the most under-served. While the issues of affordably priced housing for the marginalised,
low income groups is well-documented, the lack of standardised rental housing options for those
gravitating to India’s large economic centres has not yet found much resonance.

Majority of the metro cities are bursting at their seams due to rapidly growing in-migration, which
has put considerable pressure on the existing rental housing set-up. With more millennials entering
the workforce and continuing to contribute towards a major proportion of the population, their
lifestyle choices will contribute towards a greater need for organised rental housing. Further,
limited accommodation capacity within academic institutions for students in higher education is
also likely to act as a demand driver for similar for-rent accommodation.

However, the concept of shared rental accommodation in cities/locations offering employment and
academic opportunities, is not a new one. The migrant workforce and students have been availing
such shared rental accommodation options for the last 3 to 4 decades. Tier I cities offering abundant
employment options and improved academic opportunities have always attracted young migrants.
What is different now is the type of improved, organized shared rental accommodation options that
the migrants can access, which are a considerable improvement over the informal rented
accommodation that was available earlier.

At present, most of this demand is being catered to by the informal rental housing market, thereby
creating an opportunity gap for an improved product offering by organised players. Millennials
moving into new cities for work or education are left to deal with negative perceptions harboured
by landlords and homeowners’ about those who are single or students. This coupled with the
limited availability of quality accommodation that meets the basic requirements, makes the stay in
these unorganised set-ups, (PGs/ dorms/hostels) a not so favourable option for millennials, who
having higher disposable incomes are even ready to spend a little more to enjoy better lifestyle
standards with experience being a key element of their consumption pattern.

2,00,000+ beds Pan India Capacity of major co-living players as of Q4 2019

Problems in the current rental sector

• These informal facilities have a rather rigid structure for their residents with limited scope
for any significant modifications or relaxations. For instance, residents are not allowed to
choose their roommates and restrictions on their lifestyles might be imposed by the
owner/landlord.
• While these informal facilities provide cheap accommodation, these are ill-designed and
lack basic amenities to support a sustainable lifestyle. Lack of standardization, limited
options and no rules governing informal accommodation has also meant that this has
largely been an operator/landlord driven market with negligible bargaining power of the
residents.
• More importantly, in the name of security, most of the PGs, dorms and hostels pose
irrelevant restrictions on the social life of the residents. In addition, conflicts in terms of
violation of rent-agreement by owner/operator, hidden charges, irrational cost of
 maintenance and repair and loss of security deposit in case of an early exit are some of the
other risks posed by the informal rented accommodation market.

Community Living
A broader concept of shared accommodation/spaces supported by shared facilities and amenities

PGs, beds and Shared

Apartments,
rooms for accomodation Multi family
Dorms, Hostels
(beds and rooms) living, gated
higher & Purpose Built
for millennials communities, co- Senior Living
education Student
working neighbourhood
students Accommodation
professionals (Traditional)
(Informal) (Organised)
(Organised)

Gaining Traction in India

Student
Housing
Essentially Co-living Catering to millennials (mostly
for migrant working professionals) who have not yet
student decided to settle in a particular city
population

The Co- Living Ecosystem

For Millennials

Personal Space offering quality stay, powerful sense of community

and privacy Living arrangement (private or shared rooms) with
shared common spaces for interaction

Technology friendly and

Complete autonomy on entry and
comfortable plush spaces with free
exit with no interference from
Wi-Fi, housekeeping services and
middlemen and landlords
modern amenities

Flexibility,
Free of gender Low entry costs/flexible convenience, reduction
discrimination deposits, no brokerage in commute time and
providing common and affordable rentals easy access to social
connecting ingredients in highly desirable and physical
to residents housing markets infrastructure
India’s young workforce driving the shift
In recent years, the demand for co-living spaces has been driven by millennials or the Gen Y
population, the age group born between 1981 and 1994 (22 to 37 years). According to a Bloomberg
report, millennials account for 31% of the world’s population in 2019, slightly lower than the Gen Z
population which stands at 32%.

According to the Deloitte Global Millennial Survey 2018, given today’s globalised workforce, the
average tenure of millennials in their jobs is 3 years and most of them prefer to travel across cities
for work.

In 2018, millennials constituted around 42% of the workforce in India across top seven cities
(Mumbai, Delhi NCR, Bengaluru, Hyderabad, Kolkata, Pune and Chennai), and are expected to grow
at 6% CAGR by 2023. India is home to the largest millennial population globally in absolute terms,
with millennials comprising 34% of the country’s total population. Counting the Gen Z population,
the median age of the country is 28 years, making it one of the youngest emerging economies. India
is, therefore, a market with high growth potential for the co-living sector.

India is the third largest start-up hub in the world, with a significant number of the young workforce
willing to take up employment in new ventures. They are also willing to relocate to other cities on
job assignments. Gen Y or millennials are digital nomads who are not yet ready to put down roots,
but are willing to travel and work remotely across locations.

Growth Drivers of shared economy in

India
Multiple facets of India’s huge population and its impact on education, urbanisation and
employment bring forth some very optimistic trends for the future of the co-living sector. These
factors mentioned below will act as push factors to disrupt the private rental sector and set the
stage for organised co-living operators to consolidate and for developers to sit up and take notice of
the co-living play.

India demographics Urban rental housing

The demand side factors
• Workforce trends – The Indian workforce is expected to increase to 600 million by 2022 7
from the current estimated 473 million. (Niti Ayog) One in every four freelancers is from
India with India contributing almost 50% of global freelancers in the software domain
(PayPal report). As per a recent PayPal report, the average annual income of a freelancer
in India is INR 20 lakhs.
• Migration trends-- As of 2018, an estimated 4.7 million migrant millennials were
employed in the services sector across India’s top seven cities. According to our analysis,
this is expected to grow at a steady CAGR of 8% and touch nearly 7 million in 2023,
further boosting demand for rental housing. The major destination / in-migrant states
are Delhi, Maharashtra, Karnataka, Tamil Nadu, Gujarat, Andhra Pradesh and Kerala
(World Economic Forum Migration and Cities Report)

Millennial workforce to grow at CAGR of 6%

• Student population trends –In addition to the burgeoning demand from a migrant
millennial workforce, there exists a continued capacity accommodation constraint within
university campuses. Campuses typically fulfil 25-30% of their total student housing
demand. This presents an off-campus housing demand from close to 1 million migrant
students (aged 18-23) across the top seven cities, which can translate into a significant
 business opportunity for organised co-living players. As per the AISHE 2017–18 by the
Ministry of Human Resource Development, the number of universities listed on AISHE
heightened by 25% between the 2013–14 to 2017–18 period at a compounded annual
growth rate (CAGR) of 5%. The student enrolment has grown by 13.3% during this time
and stands at 36.64 million students as of 2017–18 for all India.

Widening gap between in-house hostel capacity and student demand

Most of the unmet demand from students is concentrated in Delhi NCR, followed by
Mumbai and Hyderabad
 Types of co-living models in India

Management Lease and Franchise

Hybrid
Contract operate Model

Partner with property

Operator acts as a
owners having
service provider and Operators lease
properties near
manages the properties buildings from property Few operators follow a
institutes, universities
and the complete owners and builders hybrid model of lease &
and large corporate
experience for a and provides them operate and
parks, through
commission. P&L either a fixed rental or management contracts
franchise-owned
responsibility is of share in revenues
company managed
property owner
(FOCM) model

Example: Zolo Stays,

Example: Zolo Stays,
Placio, Nestaway etc.
Ziffy Homes, Example: Zolo Stays, Example: Zolo Stays,
follow management
CoHo,Stanza Living, ZiffyHomes, CoHo Placio
contract model in some
Oxfordcaps
cases

Lease and operate model

Most co-living players currently operating in India have adopted the asset-light strategy of leasing
residential units or an entire block from a landlord/property owner, and sub-leasing individual rooms to
end-users. The players typically do not purchase or acquire their own properties as this entails large
capital expenditure at the outset.

Such leased properties are typically taken either on a fixed lease rental or revenue share basis for a
period of 3-9 years with the lease tenor varying across cities. The co-living player or property owner
undertakes the renovation or upgradation of the property. The revenue sharing between the landlord
and the operator is typically 50:50 and can be higher for the landlord if the latter undertakes renovation
or refurbishment.

Full ownership and management of operations

This is a co-living model in which property owners convert, reposition and manage their existing
properties as co-living spaces. In this model, no third-party operators are involved for operations and
owners pocket all the profits which are ploughed back into the management of property and expansion
of operations. Since the property owners are using their existing properties to convert into co-living
spaces there is no capital expenditure at the outset. From market interactions with several
stakeholders, we have learnt that owners of old buildings, which were initially set up as guest houses or
hotels are being converted into co-living spaces for better space utilisation and to generate income
from these assets. In Bengaluru’s central business district, parts of the erstwhile Safina Hotel on
Infantry Road have been beautifully converted into a co-living facility called ‘The Hub’, which has been
operating on 100% occupancy for the past 18 months.
Cost of fit-out for co-living operators
STANDARD

• Cost: INR 300-400/sq. ft

• Size: 120-150 sq. ft/room
• Average INR 30,000 to 60,000 per room (INR 20,000 per bed for double sharing)
• Fitout cost includes – hard and soft furniture, electronics & equipment.

PREMIUM

• Cost: Up to INR 500/sq. ft

• Size: 150-175 sq. ft/room
• Average INR 60,000 to 100,000 per room (single bed)
• Fitout cost includes – hard and soft furniture, electronics & equipment.
A Look at the Major Co-living Players in
India
Colive
Start-up Name Colive
Headquarter Bangalore
Founder Suresh Rangarajan K
Sector Co-living
Founded 2016
Parent Organization CoLife Advisory Pvt. Ltd.

About Colive
Colive is a Bangalore based co-living space provider. Colive offers ready to move-in homes, which
are located near IT parks and business hubs. These homes are chic and equipped with modern tech-
enabled safety features. Besides, all homes are fully serviced and professionally managed, and
offers flexible and affordable options suitable for urban living. These co-living spaces are designed
especially for single professionals & young couples who prefer living in a social community of like-
minded millennials.

Colive is driven by the vision to get established as India’s No.1 Coliving brand offering technology
enabled, fully-managed homes for millennials & Gen Z in urban markets.

Founders of Colive and team

Suresh Rangarajan K is the Co-founder and CEO of Colive
Suresh Rangarajan K is an alumnus of Yale School of Management. He is a chartered accountant
and serial entrepreneur. Prior to founding Colive, he was also a part of the founding team of
TimesofMoney.com and Artha, a real estate enterprise. Under his enterprising leadership,
remit2india.com went on to become the world’s #1 online money transfer portal & one of the most
successful internet businesses in India.

Arun K Singh, Co-Founder

Arun Kumar Singh (AKS) has worked in the Indian Equity Markets for over 2 decades which
provided him a ring side view of the transformation of Indian economy.

Background
How was Colive Started
During his stint at Artha, Suresh realized that India’s real estate sector has great potential. He noticed
the housing challenges being faced by the millennials in India, and to solve the same he started Colive.
The idea behind Colive was simple – to offer an effective solution to urban India’s housing owes.
The USPs of Colive Homes are-

1.Style

• Modern Furnishing
• Cinema and Sports Arena
• Fitness and games room

2. Safety

• Facial recognition based key management

• CCTV and Video Surveillance
• Emergency response team.

3. Service

• Professional House Keeping

• High-Speed Internet
• On Demand Maintenance Support

4. Savings

• Affordable rentals
• Flexi Lock in
• Instalment facility

5. Smart

• Skype booth
• Co-working space
• Community kitchen

6. Social

• Networking
• Free holiday once a quarter
• Invitation to exclusive events and parties.

Colive - Business Model and How it works

Colive has a full stack business model and it provides its services directly to the end users. Colive
takes buildings on long term contract from builders and franchise. The buildings are transformed into
branded and serviced co-living spaces and then rented out to customers.
Colive - Revenue Model

Colive has two sources of revenue-

• Fixed rentals- Under this model, Colive makes an agreement with property owners to pay
them a fixed sum. The amount of earning over and above this fixed sum is Colive’s revenue
• Property management fee- Under this model, the revenue earned from rent is shared
between the property owner and Colive in a predetermined ratio. This ratio may vary from
city to city

Colive - Funding and Investors

Colive has raised total funding of $12 Million in 3 rounds.

Funding Date Stage Amount Investor

September 2016 Seed $1Million Angel Investors

February 2018 Seed $1.8Million Ncubate Capital Partners

April 2019 Series A $9.2Million Salarpuria Sattva Group

Colive - Competitors
Competition ranges from a PG operator to the global player that provides rental
accommodation. Some major competitors of Colive are, Your Own ROOM, Stay Abode, Zolo,
CoHo, NestAway, NoBroker, Grabhouse, Square Plums, SimplyGuest and Comfy Stays

Colive - Growth

• Colive is managing 20,000+ beds

• Currently operating in 3 cities
• Currently have 3.5 million sq. ft area & 2,000 crore assets under management.

Colive - Awards
• Suresh was conferred the prestigious Udyog Rattan award and WCRC. Ernst & Young also
awarded him as the “Trend Setter in Real Estate”.
• Colive recognized as 'The Promising Brand' of the year by Economic Times

Colive - Future Plans

Colive has launches lined up in Mumbai and Pune soon. It aims to scale up from the current count of
20,000 beds to 1 lakh beds over the next two years. Colive is also planning to expand its presence to
25 university towns.
Cap Table

Employee count

Website
Real estate developers looking to own
and manage co-living spaces
In the near future, select large and mid-sized real estate developers have plans to foray into co-
living and student housing segments. Select developers have already tied up with operators in Delhi
NCR and Pune to lease out select towers from their township projects. Developers are also
exploring opportunities to construct purpose built co-living facilities and either operate the same
themselves or lease them out to operators.

Bengaluru-based Embassy Group will invest around Rs 2,000 crore to build a co-living community in
six cities in 2020. Called 'Olive', the Embassy Group’s co-living facility will be launched in Bengaluru,
Chennai and Pune this year. Olive is purpose-built for young working professionals and students in a
world-class safe and secure environment.

Olive will launch its first experiential centre in the heart of Whitefield in Bangalore and its flagship
project in Chennai. The expansion plans cover Bengaluru, Hyderabad, Mumbai, Pune and Delhi
NCR. The first phase will see the launch of 20,000 beds in total — 15,000 in Bengaluru, 2500 in
Chennai and 2500 in Pune.

Olive by Embassy projects will range from 500 to 5,000 beds and be customised with diverse
formats and priced competitively to suit respective markets.

Each Olive property will have amenities like wellness centres, cafes, chill-out areas, cooks and
shared kitchens, cinema, gaming, music and karaoke rooms, laundry, convenience stores,
coworking areas, and rooftop terraces.

Zolo Stays has been operating residential towers and bulk inventory inside residential townships
with a tie-up with leading real estate developers in India such as Olympia Group, Hiranandani,
Sobha Group, DRA, Urbtech India, SMP Builders among others in Bengaluru, Chennai, Noida, Pune,
and Coimbatore.

Further, Tulip Infratech has leased two residential towers to a newly entered co-living operator,
Housr, in Gurugram. M3M has also tied up with Ziffy Homes for its upcoming project at Golf Course
Extension Road in Gurugram.

Select large developers in Hyderabad prefer to lease out to an operator with the financial and
technical wherewithal to take on such projects. Even in Bengaluru, developers such as Elegant
Builders, Gopalan and the Ozone Group are building BTS co-living accommodations and tying up
with dedicated operators for operating and managing these facilities.
Co-living in the global market
China
Like with many other new business opportunities, China has moved first and fast in the coliving
segment. With close to 2 Million people already staying in professionally managed properties (majority
of them in coliving setups), Chinese coliving companies have truly pioneered this industry.

Increasing urbanization, explosive growth of the technology sector and increased spending power of the
middle class have all played positively towards the growth of coliving in China. It would be interesting to
see if this industry can continue growing at this breakaway speed as this is an operationally challenging
business to scale.

Number of Coliving Operators: 50

Developers, property brokerages, Hotel Management firms, PE backed start-ups and other various
players have jumped onto china's rapidly growing coliving sector, as the government of China continues
to push the idea of renting the homes instead of buying, to ease the rampant tendency of recent years of
buying simply for profit, as property prices have soared.

You+
Ziroom

Xiangyu
United States of America
Normally at the forefront of innovation and new age businesses, The USA has been a slow mover on
the coliving trend. Many operators are changing this trend by moving aggressively on this
opportunity, but they haven’t yet had a large-scale impact.

A positive trend to be noted is that the number of operators across the country has been increasing
steadily, and is expected to increase even further. It also needs to be noted that a few coliving
players from Europe are setting up facilities in the US (Both The Collective and Quarters now have
active facilities), which is creating good awareness in the market.

The US has very large real estate focused funds and many PropTech VCs. Given that coliving is
starting to prove itself in many other geographies, we can expect good traction in the next few
years.

Number of Coliving Operators: 50

Bungalow
Bungalow was cofounded in 2016 and has headquarters in San Francisco in California. Bungalow is a
residential real estate platform that provides renters with a more convenient, flexible, and
communal living solution. It utilizes existing housing supply by signing long-term leases with
homeowners, and offers multi-bedroom homes in some of the most desirable neighbourhoods in
cities throughout the United States. Bungalow offers private bedrooms with handpicked
housemates in beautifully furnished homes across seven major cities. Each home comes furnished
and includes Wi-Fi, utilities, housekeeping, and monthly community events for members.

Year of Founding: 2016

Total funding: $96M

No. of tenants: 2800

Investors: Khosla Ventures, Coatue Management Founders Fund

Bungalow has been experimenting with a new business model where it wants to align it more
closely to that of Airbnb than a Wework lease. In this model, bungalow will still handle the
roommate matching and community, like running the social calendar, furnishing the common
areas, but will take the cut from the rent paid to the homeowner, which is similar to the Airbnb
service fee structure charged to the homeowner to list the rentals.

HubHaus
HubHaus is a real estate agency that provides coliving housing solutions for working professionals.
The company was founded in 2016 and is headquartered in Los Altos, California. The company rents
out large houses, typically with five to 10 bedrooms, and then subleases out the individual
bedrooms to renters starting with a six-month lease. People can apply to rent the rooms online and
the company personally screens and matches prospective roommates together to start a housing
community.

Year of Founding: 2016

Total funding: $13M

No. of tenants: 1400

Common
Common launched in October 2015 with its first property in Crown Heights, Brooklyn and is
headquartered in New York. Common Living is a community-driven residential company that brings
community, convenience, and flexibility to housing. The company operates collaboratively and
value self-starter-ship to ensure the work is done well.

Year of Founding: 2015

Total funding: $63M

No. of tenants: 1100

Investors:

• 8VC
• Maveron
• Grand Central Tech
• Norwest Venture Partners
 Investors active in the Indian co-living
market

Various major global co-living players and funding obtained by them

Upcoming opportunities:
Hotel Chains

• Private equity firm Warburg Pincus in a joint venture with Lemon Tree Hotels Ltd has set up
a fund of $500 million to develop full-service accommodation for students and young
working professionals under the brand name of Hamstede
• Accor Hotels, a Paris based hospitality company has entered the coliving space with a
brand-new name “Jo&Joe”
Hotel owners and investors can improve rental yields by up to 12.1% if they convert an existing
property into a coliving scheme

Senior Living

Coliving isn't just for young and unmarried millennials aged anywhere between 20-30 years. Senior
cohousing is a relatively new but growing housing trend for the Older generation as well. Senior
cohousing communities can also be a more cost-effective option for older Americans who need to
stretch their retirement savings as far as possible. According to the Bureau of Labour Statistics,
Americans aged 65 and older spend an average of 35% of their income on housing each year.

Mixed Use Living

In the sense of mixed-use zoning or mixed-use planning, it is a type of urban development, urban
planning and/or a zoning type that blends residential, commercial, cultural, institutional, or
entertainment uses into one space, where those functions are to some degree physically and
functionally integrated, and that provides pedestrian connections. Instead of leaving our homes
empty for 12 hours a day and then leaving our offices empty for the other 12 hours, we need to
retool how spaces are used, around the clock.

For example, take a high-rise building of 30 floors, which were distributed in the following order:
•Floors 1 to 5 are entirely for commercial use such as supermarkets, vegetable stores, recreation
stores, medical centres, etc.
• Floors 6 to 15 are used by offices
• Floors 16 to 28 are used for residential purposes.
• The top two floors can be used for recreational activities such a rooftop bar where people come
and meet each other, Clubhouse accessible to anyone who wants to use by paying a nominal fee.

So, a person living in the 23rd floor will have to just walk down to the 10th floor for work, saving a lot
of time in commuting.
 University Collaborations

While university collaborations are commonplace across the globe, the concept is at a nascent stage
in India. In many countries such as the US, Canada and Australia, student accommodation is
provided by universities and managed by private players. With the amplified need for student
accommodation and entry of several organised players in India, collaborations among educational
institutions and private players are already happening and expected to further pick up pace in India
as well.
Regulatory and government initiatives in
this sector
The Model Tenancy Act 2019
The Model Tenancy Act 2019 may impact the student accommodation industry positively
In order to reduce the current housing gap in the country, the Act has proposed to overhaul the
legal framework that currently governs rental housing, thereby encouraging private participation in
the segment. This move is expected to impact the student accommodation industry as well. Some
of the provisions of the act which are likely to ease the rental housing process are as follows:

Security Deposit:
• The act has capped the security deposit to a maximum of two months’ rent in case of a
residential property and minimum of one month’s rent for a non-residential property.
• Although there is no clarity on whether the student accommodation industry would fall
under the ambit of residential or non-residential property, lower deposits would act as an
advantage to the industry.
Unit Management
• Since there is a regular outflow and inflow of tenants in such units, these properties are
subjected to frequent wear and tear. For this purpose, the act has explicitly specified the
responsibilities of both the landlord and the tenant.
Rent Courts and Rent Tribunals
• As per the Act, it is the responsibility of the state governments to constitute rent courts /
rent tribunals as they deem necessary, thus providing a grievance redressal platform to
both landlords and tenants.
Demand estimation for co-living in India
• Using GDP estimates & growth rate to derive & focus on top 30 Major Economic centres
• Population enumeration for Age Group Classification: 20-39 years
• Extrapolating and dicing Census 2001 & 2011 on 20-39 Years in Top-30 Cities
• Segregation based on marital status, domicile status (domicile/migrant) in relevant age
group
• Analysis based on home ownership data (rental/owned) and parity (education level, assets
possession, job level classification)
• Segregation based on main white-collar workforce out of total workers for age groups

CO-LIVING DEMAND=

Working Singles living on rent (migrants and domiciles) + Unmarried student

population in the same age group

Chosen age group for demand estimation Population in age group 20-39 years in Top-30 Cities:

~ 4.63% of total population of India

~ 7.72% of total working age population of India

~ 15.84% of the urban population of India

~many students in the age group of 20-24 years and 25-29 Years might opt for core living instead of
student housing and thus their numbers have to be included to calculate the total size of co-living
market

Only one in 6 students is able to find hostel accommodation. This demand-

supply mismatch is largely being met by unorganised sector at present

Although 35-39-year olds represent a small ratio in number of singles; their high ratio of parity in
terms of income level proposes a sizeable share in core demand

Potential of Domicile Singles Moving out of Parental Households = Additional 15-

25% of core demand

(INCREMENTAL DEMAND)
What lies ahead for the co-living market
in India
As of 2018, the realised demand in the top seven cities stood at about 94,000 beds. Most of this
demand came from the millennial workforce employed in these cities, followed by students who
had migrated for pursuing higher education. While the market has witnessed rapid strides in the last
two years, realised demand continues to be miniscule, given the size of the overall opportunity. This
can be gauged from the fact that the currently realised demand accounts for merely 2.6% of the
overall shared rental accommodation opportunity.

At the same time, it is relevant to note that the existing capacity of organised players stands at
nearly 108,000 beds across the top seven cities. Further, most of these capacities operate at more
than 85-90% on the back of strong demand and limited supply in these cities. Going ahead, the
supply of beds by organised co-living players is expected to increase by more than 5 times to about
541,000 beds by 2023. Delhi NCR and Bengaluru will account for more than 50% of this cumulative
capacity. In response to this strong expansion in supply, demand will grow in tandem to about
470,000 beds.

Co-living market to become INR 1-trillion opportunity by 2023

India’s co-living market is expected to increase at a strong CAGR of 17% in the next five years to
burgeon to a nearly INR 1-trillion market. Delhi NCR will constitute nearly 40% of this potential
market opportunity by 2023, followed by Mumbai at 25%.
References:

Personal interaction with a leading student housing operator based in Delhi with over 1300+ beds

• Co-living Rent a lifestyle 2019 by Knight Frank

• C0-living: Reshaping Rental Housing in India by JLL and FICCI, June 2019
• Co-living Redefining urban rental living, A Cushman & Wakefield Research Publication
• Global co-living report 2019 by The Housemonk
• https://www.cbre.co.in/en/about/media-centre/cbre-sapfi-herald-of-a-newchapter-student-
accommodation-in-india
• https://www.businessinsider.in/china-coliving-increased-rents-and-indianstartups-like-
nestaway-coho-and-lemon-tree-hotels-hamstede-should-bewary-of-
it/articleshow/68668281.cms
• https://www.thehindu.com/business/co-living-can-grow-into-a-93-bnmarket-in-india-
report/article26231293.ece
• https://redseer.com/newsletters/co-living-market-updates/
• https://www.business-standard.com/article/companies/co-living-space-inindia-worth-12-
bn-on-back-of-10-mn-millenials-report-119041500589_1.html
• https://www.thehindubusinessline.com/news/real-estate/housingcom-enters-co-living-
space/article30608482.ece
• https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/stanza-living-to-
invest-rs-150-cr-for-working-professionals-accommodation/articleshow/74476233.cms
• https://www.constructionplacements.com/co-living-spaces-india-list/
• https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/co-living-firms-
partner-with-realty-companies-for-customised-
spaces/articleshow/73063579.cms?from=mdr
• https://www.financialexpress.com/industry/millennial-workforce-growing-student-
population-turn-co-living-into-attractive-asset-class-for-investors/1829792/
• https://www.thehindubusinessline.com/news/real-estate/housingcom-enters-co-living-
space/article30608482.ece
• https://www.thehindu.com/business/co-living-can-grow-into-a-93-bn-market-in-india-
report/article26231293.ece
• https://tracxn.com/d/trending-themes/Startups-in-CoLiving