Co-living start-ups providing comfortable, affordable accommodation to millennials are making the most of the thriving sharing economy
Brands like Uber, Airbnb, WeWork and Ola are fuelling the demand for “sharing”. Co-living, a niche concept earlier, is currently witnessing heavy traction, thanks to the rise in the number of start-ups catering to this segment.
A highly-specialised domain within real estate, co-living has the potential to grow into a $93 billion segment over the next many years in India, as per a report by PropTiger. The report further states that the segment has a heavy potential, with an untapped demand for over 46 million beds.
Start-ups are channelising technology and design to transform mundane buildings into contemporary co-living spaces that ride high on comfort and convenience and effectively enhance the lifestyle of students and millennials. Similar to the co-working concept which has gathered momentum in the gig economy, the co-living model boasts of maximising the usage of spaces such as kitchens, utility rooms, common areas, etc, which are not fully leveraged in conventional homes.
“Co-living relies on maximising the efficiency of space usage in a property. If you look at traditional apartments, the kitchen and living rooms are barely used 5-12% of the time. By taking such areas out of the unit and making them technologically smarter and available as shared community spaces, we are able to use space more efficiently and thus provide better value to our members, while simultaneously earning a better rental yield for our landlord partners,” says Azaan Feroz, founder and chief happiness offer, The Hub Bengaluru, a co-living start-up.
Entrepreneurs believe that students and millennials, the chief target of co-living brands, yearn for everyday conveniences like housekeeping, payment of utility bills, ready availability of food, etc, all of which get taken care of by the co-living space.
“Moreover, the floor plan is designed to facilitate interactions and connections. From custom-built community kitchens to shared laundry rooms and cosy hang-out nooks, there are ample opportunities to connect with energetic millennials from all over. This is something that millennials yearn for,” says Feroz, who adds that The Hub currently has over 80 members living in Bengaluru.
Another chief reason that is attracting millennials and students towards co-living spaces is the fact that the cost of living gets reduced by as much as 15-20% due to shared spaces and amenities. Experts say monthly rent can be Rs 10,000-25, 000 per person, inclusive of maintenance, utility, housekeeping, food, wi-fi and community bonding events.
Start-ups are expanding their offerings by refurbishing existing facilities to make them co-living compatible and also by opening greenfield facilities by tying up with real estate companies.
StayAbode has tied up with CP Developers to build a co-living project in Bengaluru that can accommodate 1, 400 people in a community environment. StayAbode, which recently received an add-on to pre-Series A funding from Voyage Group and others, presently has 1,200 beds across 19 properties in Bengaluru. It expects 1,000 more beds to go live in the near future. “We have taken some interesting steps after signing our first greenfield project, while we continue to grow our brownfield projects,” says Viral Chhajer, co-founder and CEO, StayAbode.
NestAway Technologies has 25,000 beds in the shared-living space and a presence across 12 cities. “We focus on living-as-a-service rather than housing-as-a-service. Apart from listing shared homes and helping customers rent them, we are planning to offer other services by subscription including furniture, office transportation and insurance of belongings. We will soon launch in more cities including Mysore, Chennai, etc,” says Ismail Khan, senior vice president of business, NestAway Technologies, which has so far raised $94.2 million in multiple rounds from investors like Goldman Sachs, Ratan Tata, IDG India and others.
National Capital Region (NCR)-based Stanza Living, which has received cumulative investments of $12 million from the likes of Matrix Partners, Sequoia India and Accel, caters to over 2,000 students with co-living facilities across Delhi and NCR. According to co-founder Anindya Dutta, the venture plans to foray into newer markets like Pune, Hyderabad and Bengaluru over the next few months and grow their bed capacity multifold.