The demand for co-living in terms of beds is slated to grow to 5.7 million by 2025 from 4.19 million this year.
In its report 'Co-living-Redefining urban rental living', Cushman & Wakefield has pegged the market size is USD 6.67 billion in 2019 and, this will grow to USD 13.92 billion by 2025 across top 30 cities.
The market will witness a compound annual growth rate (CAGR) of 11.2 per cent.
"Co-living is an evolving sector and is expected to grow more than two times by 2025 in the top 30 cities which are the major economic centres in the country. Within India, the co-living model is currently catering to mostly millennials comprising single, young working professionals and student population," said Anshul Jain, Country Head & MD-India, Cushman and Wakefield.
Furthermore as the business evolves, co-living would transform the face of the rental housing market in urban centres, similar to what flexible working space has done to the office rental space, he added.
"Co-living market in India is evolving at a rapid pace, with investments from national and international institutional investors bringing in much-needed seed capital as well as future rounds of funding thereby allowing a new business model to thrive and aim towards achieving scale," the report said.
Co-living operators are tying up with developers for built-to-suit property options, an upcoming trend likely to prevail in the sector. Operators opting for ready to move in properties which are refurbished and renovated as per their requirements are showing preference for properties having at least 50-60 rooms.
Pan India capacity of major co-living players as of fourth quarter 2019 stood at over 2 lakh beds and, the same is estimated to reach to 6 lakh beds by 2021.
With more millennials entering the workforce and continuing to contribute towards a major proportion of the population, their lifestyle choices will contribute towards a greater need for organised rental housing.
Further, limited accommodation capacity within academic institutions for students in higher education is also likely to act as a demand driver for such rent accommodation.
However, the consultant said, the concept of shared rental accommodation in cities or locations offering employment and academic opportunities is not a new one.
The migrant workforce and students have been availing such shared rental accommodation options for the last 3 to 4 decades.
"Millennials moving into new cities for work or education are left to deal with negative perceptions harboured by landlords and home owners' about those who are single or students.
"This coupled with the limited availability of quality accommodation that meets the basic requirements, makes the stay in these unorganised set-ups, (PGs/ dorms/hostels) a not so favourable option for millennials, who having higher disposable incomes are even ready to spend a little more to enjoy better lifestyle standards with experience," the report said.
Cushman & Wakefield is a leading global real estate services firm with 48,000 employees in about 400 offices and 70 countries. In 2017, the firm had revenue of USD 6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. MJH SHW SHW