Co-living, Co-working Provides Higher Rental Yields Than Traditional Leasing Models: Report

A report ANAROCK shows that co-living, co-working and student housing provide 7-11 per cent higher rental yield than 3 per cent national residential average

learn more about Shreya Ganguly

By Shreya Ganguly


Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

India is moving towards a shared economy thereby reducing the need for owning assets. With deeper penetration of technology and Internet, products ranging from real estate to vehicles, from electrical appliances to clothes can now be rented easily using a smartphone. The shared real estate business is however experiencing massive growth owing to changing demographics, proliferating entrepreneurship, digitisation and millennial demand.

According to February 2020 report by ANAROCK Property Consultants, co-living, co-working and student housing provide 7-11 per cent higher rental yield than 3 per cent national residential average.

"Coliving, student housing and senior living are the next evolutionary step in the residential real estate domain, while coworking has evolved from traditional office real estate. The drivers behind this evolution are changing social dynamics, a highly enabled start-up environment, rising interest in higher education by migratory student population, and the need for quality housing solutions for senior citizens," said Anuj Puri, chairman of ANAROCK Group.

The report also revealed that the senior living segment in India has immense potential because life expectancy here has improved to 68.8 years in 2018.

Increasing Focus on Co-working Space

For the uninitiated, coworking refers to shared workspaces between multiple companies that prefer to be present within a cross-cultural environment. The idea of co-working is not new in India but it gained popularity in recent years with the boom in the startup ecosystem.

According to a June 2019 report by JLL and FICCI, the co-working market share in office leasing in the top seven cities of India increased from 8 per cent in 2018 to 12 per cent in Q1 2019. The report also states that Mumbai had the highest proportion, 14 per cent, of co-working space to total office leasing in 2018.

The ANAROCK report also revealed that the plug-n-play nature of co-working spaces is one of the major factors behind its popularity. Coworking spaces allow companies to rent an office or just a desk and start focusing on work. It helps in providing basic infrastructure including workstations, conference rooms, internet connectivity, housekeeping, pantry services, etc.

Earlier while speaking with Entrepreneur India during the Startup Summit 2019 organised by Franchise India, OYO-owned Innov8 founder and CEO, Dr Ritesh Malik had said, "Co-working had made the most amazing impact on start-ups. In my first start-up, I spent 35 per cent of my seed capital in security deposit to landlord, fees to the architect and building my office. With co-working spaces, you need to just plug and play."

Credit: CII-ANAROCK's report 'Emerging Asset Classes: The Future Looks Promising'

With using co-working spaces, startups can efficiently use their capital for scaling operations rather than investing it on real estate and furniture. Not only small-sized companies but corporations such as Paytm, Zomato, Microsoft and Twitter are also availing co-working spaces.

Apart from Innov8, other players such as Awfis, CoWrks, 91SPRINGBOARD, and Smartworks dominate the co-working space.

Co-living Popular Among Millennials

Co-living is increasingly gaining popularity among the young population who change cities for education and work purposes. According to the report, The top 6 coliving players in India currently have 1.18 lakh beds priced between INR 6,000-30,000 per month.

Credit: CII-ANAROCK's report 'Emerging Asset Classes: The Future Looks Promising'

Co-living has high demand because it has enabled millennials to live in newly-furnished spaces with a range of amenities at an affordable cost. Earlier while speaking with Entrepreneur India, Rohit Kapoor, chief executive officer of new real estate businesses in hospitality unicorn OYO explained that finding a suitable place to stay in an unknown city is not easy as one needs to decide on a suitable location, transact with landlords and brokers and also arrange for high security deposits.

"It is even more difficult when people are moving to a new town for a short-term project or looking for weekday accommodations to avoid the daily commute. This is where the concept of co-living solutions are attracting customers, especially students and the young workforce," Kapoor added.

One of the major advantages of opting for a co-living spaces as opposed to paying guests or hostels is that it significantly reduced the cost of living because tenants share the rent however also get to enjoy add on services such as daily housekeeping, laundry, on-call resident facility management, daily meals, among others.

Shreya Ganguly

Features Writer

Covering startups and investments for Entrepreneur India. Previously a startup correspondent at Inc42. Reach out to me with interesting story ideas at 

Related Topics

Business Process

Why Embracing Chaos is Crucial to Your Success and Longevity

Chaos engineering is a popular idea in software engineering, centered around the premise that deliberately breaking a system to gain information will ultimately help improve that system's resiliency. Given the uncertainty of our times, CEOs might want to apply this type of approach in their corporate sustainability strategies.


21 Productive Things to Do During Your Commute

How to use this frustrating "wasted time" to get smarter, more focused and re-energized.


5 Winning Habits That Will Transform Your Leadership Skills

Ready to take your leadership skills to the next level? Discover the five winning habits that will transform you into an exceptional leader!

Thought Leaders

The Collapse of Credit Suisse: A Cautionary Tale of Resistance to Hybrid Work

This cautionary tale serves as a reminder for business leaders to adapt to the changing world of work and prioritize their workforce's needs and preferences.


4 Ways To Negotiate For A Good Salary

Negotiating a salary can be an intimidating task for many, especially for those who are just starting their careers. However, with the right approach and mindset, this can become a smooth and successful process.