Coliving

India's Rental Disruptor

What is Coliving?

We live in a globally connected world and this has led to the real estate sector experiencing disruption led by nomadic millennials, who are redefining the meaning of ‘living’. Co-living, the new mantra within the ambit of alternative asset classes is a form of housing which combines private living spaces with shared communal facilities.

Who is the target audience?

The Plug and Play Millennials

The biggest driving force behind the rising popularity of co-living spaces are the young renters moving to new cities for job prospects who are looking to meet and connect with new people. In every sector millenials are transitioning from owning to sharing. The rising population of millennials and their share in the workforce are key to these changing times in India. 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. Moreover, 40% of the millennial workforce are migrants who have limited budgets, but rate flexibility and convenience at the top.

The Coliving market in India

Metropolitan city centers, near employment hubs like IT parks, special economic zones or universities are being redesigned, repositioned and rebranded keeping millennials in mind. This trend is giving impetus to an organized rental market in many Indian cities in the same way as co-working spaces did for shared office spaces.

CoHo: A coliving startup

Coliving a new take on an age old concept - Suresh Rangarajan, CEO Colive

CoLiving or Rental?

The Real estate market for Coliving

Why is coliving a viral trend?

The rental market in the country boycotts single women and men. It is becoming increasingly difficult for single people to find homes in metros which offer the highest job opportunities. Coliving directly addresses this issues by targeting these distressed millennial renters and hence had gained traction in recent years.

Single Women cannot find homes in India's biggest metro - Mumbai.

Aravind Adiga: Mumbai's bachelor bigotryAravind Adiga: If you want to rent a flat in Mumbai, take care you don't belong to that very worst minority: the single man

Coliving in Numbers

3.6 Million beds in 2018 to 5.7 million beds in 2023
India’s co-living market is expected to increase at a strong CAGR of 17% in the next five years 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%.
Expected growth: 458 billion (6 billion USD) INR market in 2018 to 997 billion INR (13 billion USD) in 2023.
10 - 20% profits for operator
2 to 4 times residential rental yield for Landlords
Several models: Management contract, Lease and Operate, Hybrid, Franchise model. The lease and operate model is most prevalent

Coliving: the disruptor

Young working professionals move from care of parents to care of corporates
Coliving hikes rent substantially by marketing current trends, community and freedom
Plug and play rental - Short term tenants between 1 week to 11 months
Landlords are forced to lower their advance (security deposit) demands from 6 months to 1-2 months as they are unable to compete with the growing coliving industry
Higher demand for housing amenities, services and design
Demand for formal rental agreements
Targets only one sector of the population and income bracket. Coliving ignores low income population, large families, seniors.
Encourages racial and income segregation
Geographic concentration: Coliving startups target only city centers and thriving neighborhoods making these areas more inaccessible to majority of the middle and low income population

Coliving underwiting_Draft 1

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