By Accommodation Times Bureau
Even though several players have already gauged the latent demand and have into in to making the most of the opportunity the co-living space segment offers, this potential real estate goldmine still remains largely untapped. This is evident from the fact that the supply by organised players in co-living is currently limited to over one lakh beds. Assuming they earn Rs 1.44 lakh per annum per bed, organised players in this segment are currently generating a combined Rs 1,440 crore ($206 million). If the existing demand-supply mismatch is fixed, this segment has the potentially to grow into a $93-billion market, PropTiger report.
According to the University Grant Commission (UGC) data, there are 935 universities in India, affiliated with nearly 50,000 colleges and institutes. According to the Department of Higher Education, approximately 30.8 million students were pursuing regular higher education courses as of 2016. Out of this, nearly 12.3 million students were migrants. As per a survey, 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, etc.
Similarly, trend analysis since FY12 highlights that approximately 160 million students enrolled for higher education the on pan-India level, as per the Department of Higher Education. Out of this, nearly 84 per cent of youth is employed, according to a report by the State of Working India 2018 (SWI). In total, India had 37.4 million migrant professionals earning Rs 0-10 lakh in 2018 who have completed their higher education between FY12 to FY16. A major part of this population is still served by unorganised rental options.
The co-living sector has a total untapped demand of approximately 46.3 million beds, out of which 8.9 million is from student housing.
“Through innovation and tech, co-living players have created a completely new segment of the rental market in India. This market makes an investment in rental housing attractive and gives investor options to focus beyond the commercial office and retail spaces. Enormous size of this market is attracting larger players such as WeLive and Oyo living and driving up investment in this segment.” said Ankur Dhawan, Chief Investment Officer, PropTiger.
Uttar Pradesh, Maharashtra, Tamil Nadu, Karnataka and Telangana together make up for 48 per cent 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 per cent, followed by a 13 per cent demand in Maharashtra. The southern states, Tamil Nadu, Karnataka and Telangana, have the combined demand of 16 per cent.
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.