India’s coliving industry expected to double by 2024: Colliers

Although the pandemic marred the growth of the shared living industry in 2020, it has already seen an upturn this year. The coliving segment is expected to have 4,50,000 beds mostly run by organized operators by 2024, up from 2,10,000 beds by the end of 2021, Colliers said in a note titled “The Future of Coliving in India.” .

“With the situation improving rapidly, the industry has recovered significantly and appears to be more optimistic. The main factor contributing to recovery is the increasing rate of vaccination. The unemployment rate fell to 7% in November 2021, a gradual decline from 11.84% in May 2021. Additionally, amid the pandemic, hiring by IT companies accelerated, followed by robust industry performance that will only add to demand. for coliving over the next few quarters, ”said Ramesh Nair, CEO, India & MD, Market Development, Asia, Colliers.

The concept of a “shared economy” was put to the test during the height of the pandemic. Factors such as uncertain economic conditions leading to the loss of jobs, working from home and the displacement of the migrant population to their respective home towns as a result of the covid-19 epidemic brought an immediate end to the evolution of the cohabitation sector.

Between December 2020 and March 2021, the occupancy rate in most cohabitation facilities crossed the 45-50% mark as the market improved and from 60-70% in the fourth quarter of 2021. However, the second wave turned out to be a drag from the second quarter, as the occupancy rate fell sharply.

The cohabitation segment is also expected to experience an upturn in occupancy in 2022 with factors such as the increase in the workforce, migration to urban centers for jobs, the shared living sector not organized and growing student population increasingly seeking the modern organized cohabitation model.

“Coliving has great long-term potential in the subways. However, the current market scenario presented an opportunity to consolidate and reconfigure the market. While many players left the company because they could not endure the financial stress of the previous year, others took the opportunity to strengthen their position through strategic acquisitions and expansion into prime locations. in metropolitan cities, ”said Subhankar Mitra, Managing Director, Services Advisor, Colliers India.

Many investors are already actively researching options in the market to create flexible cohabitation facilities. The profitability of a higher yield compared to a traditionally rented house has resulted in an influx of new players every year where this trend is expected to continue over the next several years. Coliving offers attractive returns; 2 to 4 times higher than the traditional residential yield of 2 to 3%.

However, coliving in India is still in its infancy and operators are constantly updating their metrics. The pandemic has again pushed operators to the drawing boards to reinvent their strategy in order to offer an attractive and safe housing solution.