01 May 2019
Do Co-living Startup are Big Threat to PG/Guest House/Budget Hotels in India?
By Sanjay Bansal Founder & CEO
AHI Realty/AffordableHomesIndia Gurgaon
Updated 1st May 2019, 09.36 AM
The Gurgaon is a hub of millennial executives and students, being close to Delhi, a large education institute, and under half an hour from IGI Delhi, Home for Cyber Hub/Large corporate buildings and other marquee names. Young professionals and students are at the mercy of owners and agents, who decide amongst themselves who gets in and who’s banned. Rules are arbitrary and often over-bearing for young adults [curfews, no friends or family, vegetarian fare only], making the experience of house hunting for these millennials one long-drawn nightmare.
Gurgaon landlords typically avoid bachelors or demand 3 months’ rent as deposit, for example, and that’s a heavy burden for someone starting out in their careers while living away from home.
It is into this mess of arbitrary demands, unkept promises and all-around disarray that a glamorous cousin of hostels and PGs has checked in— the co-living space. A number of hospitality companies are now expanding in this market, offering clean and comfortable dwellings and hygienic food, clear policies and pricing, on-demand services through apps, and a collegiate atmosphere with group activities, performances and that ultimate marker of casual, cheerful spaces—foosball.
If co-working has taken the world of work by storm, the belief seems, co-living could well be the next big trend for young professionals and students.
Just rent a home, get a lifestyle!!
Ziffyhomes, one of India’s largest providers of co-living accommodation. There are at least 20 to 25 accommodation options in Gurgaon.
Ziffy Musica is a premium offering, with foosball, table tennis, carroms and a gym, with an indoor cricket pitch being laid to coincide with the start of the latest edition of the Indian Premier League tournament. Inside, each flat comes with a refrigerator, kitchenette and basic utensils.
There is a kitchen on premises and menus are constantly tweaked based on resident feedback. “We have premiumised the previously unorganised market and are streets ahead of the competition,” Saurabh Kumar Ziffyhomes co-founder, said. Two months from now, the company will also launch a community product to give residents more reasons to hang out together and a one-stop platform to socialise.
At Ziffy Musica, Anshuman Jayant, 22, does a quick jig after scoring a goal at the foosball table. He moved into this property with six of his BITS Pilani classmates one months ago and loves the environment. For Jayant, who works at a startup 2 minutes away, this building works well. They initially took the usual route, hunting for a shared apartments or a PG, but found this far more convenient, given their crazy work days. “Everything here--from booking the room to paying for it and add-on services—are done on the app. So it frees us from the typical headaches of fixing utilities, finding help and housekeeping,” he says.
By 2022, we largely believe the word co-living will replace phrases such as hostels and PGs in common usage” Sanchal Rajan CEO & cofounder
Across Delhi, Mumbai, Chennai, Hyderabad and even in the education hub of Kota, such co-living ventures are taking root. For instance, Hyderabad, with some 400,000 new seats being built out in the outsourcing space, could easily evolve into India’s co-living hub. For students who arrive in a new city, these facilities are emerging as top options.
FACTS ABOUT C0-LIVING SPACES
Co-living spaces 20% costlier than oldschool paying guest accommodations and hostels New co-living spaces in huge demand, with occupancy at over 80% Interstate migration rate doubled to 4.5% in 2001-2011 compared to previous decade Workforce in India likely to increase to 600 million by 2022, compared to 473 million in 2018
Between 2013-14 and 2017-18, number of new colleges rose by 25% triggering a rush for student accommodation Besides more vibrant common areas, these companies are organising events, tying up with brands to offer discounts and promotion to residents and offering adjacent services [think CV writing for final year students] to keep them engaged.
Today, the overall market share of rental housing in India can be anywhere between 35-45% of the total residential market, according to estimates from real estate consultants.
This share of rentals is increasing, especially rapidly in urban areas, which account for more than two-thirds of the rental market. In the 2011 census, 28% of respondents said they were renters, but experts think that number has spiked sharply in the past few years.
According to IMF’s last estimate in 2016, India residential rental market was estimated to be a more than $20 billion market comprising of $13.5 billion in urban areas, $0.8 billion in rural areas, and $5.7 billion of vacant properties held by non-resident Indians living abroad If the opportunity appears massive, bringing some of this into the co-living market is harder than it appears.