#7 Reasons Co-living Spaces are the Next Big Thing in the Real Estate Industry
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Global real estate services firm JLL predicts that by 2030, up to 30 per cent of all office spaces will adopt the co-working model in some form or the other. This movement in turn, is paving the way for an emerging, capital-efficient way of living. In Europe and the US, co-living is already evolving into a fast-growing asset class, ticking all the right boxes for real estate players as well as new-age clientele.
Here’s looking at seven reasons why co-living is all set to take the Indian realty industry by storm:
As a modern, urban accommodation with shared residential spaces, co-living offers a higher rental yield of 9-12 per cent for real estate developers, as compared to the current average yield of 1.5-3 per cent on residential properties, paving the way for a new asset class in real estate investing.
Interestingly, co-living spaces also bring down the average cost of living for the consumer by about 15 per cent on account of optimal real estate utilization and economies of scale. Co-living is all about sharing the lower utilization areas – kitchen, utility area, living room, etc - with a larger community to increase the per sq. ft. utilization of residential space.
That Community Feeling
Studies show that more than 40 per cent young professionals suffer from chronic loneliness. Human beings have an innate need to belong. The Dutch have a beautiful word for it – Gezelligheid. Meaning convivial, cozy, fun, quaint, or nice atmosphere, but also connoting belonging, time spent with loved ones, general togetherness that gives a warm feeling.
Often, that sense of community is something that’s missing in the lives of global nomads. With the smart blend of private and communal spaces, co-living makes it effortless to bond with like-minded people. From movie nights to brunch parties, there’s always something to bond over!
Imagine living in a boutique hotel that feels like home. Based on the plug-and-play model, co-living saves residents the stress of dealing with everyday household chores.
The monthly rent includes everything – from maintenance, housekeeping, laundry and furnishing to water, electricity, Wi-Fi and entertainment. That way, you can focus on things that really matter. Besides, the tedious process of relocating to a new place becomes a lot more convenient!
Thanks to a globalized workforce, young professionals today are traveling and relocating frequently. The traditional leasing commitments don’t work for this always-on-the-move generation that demands more than cookie-cutter solutions.
Co-living offers an agile living arrangement that not only keeps the costs under control, but also makes the logistics easier. Depending on your requirements, you can take an accommodation on lease for 12 months or as short as three months!
With growing safety concerns, especially for women, it’s important to build residential spaces that exude a sense of comfort and security. It takes more than 24-hour CCTV surveillance to make someone feel safe.
Over the last year at StayAbode, we’ve seen a boost in the ratio of female residents – from 28 per cent to as high as 40 per cent – in some of our co-living properties. Factors such as access card entry and background verification as well as screening process of the staff and residents make co-living a safer residential option.
It’s easy to assume that a co-living space is similar to a paying guest (PG) accommodation. Yet, the assumption couldn’t be further from the truth. While PG options are pocket-friendly, they are never really a lifestyle choice.
With co-living, the emphasis is on design and service. In terms of infrastructure, a typical co-living space is a lot more luxurious than a conventional one- or two-BHK. It’s for those who fancy a certain standard of living.
Worldwide, co-living is associated with millennials (people in their 20s and early 30s). Constituting over 30 per cent of India’s population today, by 2020, their numbers are expected to touch 40 per cent. And this is a market that’s largely untapped in India.
As the need for affordable housing within the city continues to grow and the urban traffic situation worsens, the landscape of residential real estate is bound to change. Co-living, as an emerging asset class, will soon see established developers enter the fray. It’s only a matter of time before co-living becomes a long-term solution to the urban housing crisis. Not just for the millennials, but varied niche groups.