The driver for Co-Living is the young workforce and students who ordinarily shore up to the metro cities for education, internships, or jobs. Student Housing and Co-Living got prominence in the last couple of years when Generation Y&Z drove shared economy and commerce ideas. It gave significance to various co-living operators like Zolo Stays, OYO Life, NestAway, Hoolive, Stanza Living, Olive Living, and several more. However, the notion of “Shared Economy” got severely tested in the era of the pandemic. Work from home and hybrid working becoming commonplace had impacted the occupancy in workplaces and Co-Living facilities.
Uncertain financial situations, loss of jobs, work from home, and migrants returning to their respective hometowns in the wake of the Covid-19 outbreak brought the fledgling Co-Living sector to a grinding halt. Migration to urban regions is the largest driver of demands for Co-Living spaces. India has witnessed about 35-40 million sqft of Grade-A workplace absorption each year till 2019. However, in 2020 net absorption fell by 10-15%, which is anticipated to stay low in 2021. The unemployment price also rose to 11.3% in the course of this period.
Moreover, there was 10X development in work from home for the current workforce, resulting in fewer takers for the Co-Living spaces. The circumstance enhanced involving December 2020 and March 2021, when occupancy was restored to about 45 to 50% in most Co-Living facilities. Still, quickly the second wave place a dampener from Q2 onward.
As the circumstance stands in Q4 2021, the sector is seeking far more optimistic than prior to. The principal element is the vaccination which is about to touch the one hundred cr mark. The unemployment price is down to 6.8% from the preceding higher. Hiring by IT corporations has gathered pace followed by robust functionality of the sector. And on major of it, most of the organizations are recalling their workers back to the workplace.
On the student housing front, campuses are anticipated to be buzzing once more for the Odd semesters. Colliers have surveyed 150 private institutes across the nation. It revealed that migrant students are more than 200,000 on these campuses, whereas only 60 to 70% of students are presently becoming supplied with hostel accommodation. Thus, creating an untapped industry of 60-70,000 prospective bed capacity.
Student Housing and Co-living provide worth for funds options to young migrants who otherwise face several challenges in a metro city to locate accommodation in a housing society. There are security and safety issues apart from many nuisance values developed out of cultural variations. The sector is going to obtain additional strength and momentum as workplace occupancy peaks up by 2022.
Co-Living has lengthy-term prospective in the metro cities. However, this is the time for consolidation in the industry. While several players who could not sustain the onslaught of the preceding year have exited the small business, other folks took the chance to strengthen their position by strategic acquisitions and expansions. The sector will also witness an escalating adoption of technologies, revolutionary pricing, and a improved-staying knowledge. As each challenge also brings some chance, the sector will see a turnaround and transformation in the time to come.
(By Subhankar Mitra, Managing Director, Advisory Services (India), Colliers)