The average monthly rentals in co-living properties, including student housing, declined by 10-25 per cent across major after the outbreak of the COVID-19 pandemic, according to property consultant Colliers India.
In its whitepaper 'Future of Co-living in India', Colliers India mentioned that the number of beds fell to 1.3-1.4 lakh in 2020 from 2 lakh in the previous year, while the occupancy level dropped to 40-60 per cent. There has been a dip of 10-25 per cent in rentals post-COVID-19, it pointed out.
During the 2021 calendar year, the supply has again bounced back to over 2.10 lakh beds, and the occupancy level improved to 70 per cent.
''The concept of 'shared economy' got severely tested during the peak of the pandemic. Factors such as uncertain economic conditions resulting in loss of jobs, work from home and the shift of migrant population to their respective hometowns in the wake of the COVID-19 outbreak brought the evolving co-living sector to an immediate halt,'' the statement said.
On the outlook for the next year, Colliers said the segment would witness a recovery, driven by reopening of offices, record vaccination and reopening of colleges in a phased manner. The number of beds could surge to 4.5 lakh by 2024.
'With the situation improving rapidly, the sector has recovered substantially and is looking more optimistic. The primary contributor to the recovery is the growing rate of vaccination.
''The unemployment rate is down to 7 per cent in November 2021, a gradual dip from 11.84 per cent in May 2021. Also, amidst the pandemic, hiring by IT companies has gathered pace followed by robust performance of the sector which will only add on to the demand for the co-living in coming quarters,'' JLL India CEO Ramesh Nair said.
During the period of 2015-2019, Colliers India MD (advisory services) Subhankar Mitra said, the student housing and co-living witnessed exponential growth resulting in sharp increase in the number of operators and investments.
''However, the pandemic marred the growth story of co-living temporarily, resulting in some players exiting the business thereby creating opportunities for acquisition and expansion for the others,'' he added.
The segment is now ready to enter a new phase of growth driven by factors such as pain point assessment and product recalibration, Mitra said. Organised co-living is concentrated largely in metro and tier I cities of India with expansion being witnessed across tier II cities as well, the report said.
The key players in this space are -- Colive, Stanza, Zolo, Housr and Nestaway. There are around 50 co-living operators. The rental yield in this segment is high at 7-9 per cent. ''Co-living in India is still in its nascent stage and the operators are constantly updating their metrices,'' the report said.
The pandemic has further pushed the operators back to the drawing boards to reinvent their strategy to provide an attractive and safe housing solution, it added.
New players keep entering this segment because of higher yield compared to a traditionally rented house. The product offering is constantly evolving as new entrants are experimenting with specifications, amenities and services.
(With inputs from PTI)
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