The co-living concept is here to stay! This collaborative system is creeping into the rental sector and will soon jostle for space in the traditional landlord-controlled rental environment.
With over 40% of our country’s population being below the age of 20, the demand for higher education is on continual rise. Thus, there is a desperate need for quality, safe, and standardised accommodation in India.
Majority of colleges don’t provide on-campus accommodation, as a result of which students resort to PG accommodation or private hostels. PGs are challenging to find, have poor security, and their quality varies city to city. Most private hostels, on the other hand, are scarce and therefore the reputed ones tend to fill up fast. This sector remains mostly unorganised and unregulated.
Students migrate across the urban landscape of our country to seek quality education, which comprises of two things, i.e. academics and student life. The latter is significantly impacted by where they live and how conducive their environment is for learning.
Staying at a safe, comfortable environment with like-minded residents is something that every student is entitled to. Post conducting in-depth research at the ground level, it was realised that this wasn’t the case for most students. They were either forced to stay at on-campus college accommodation, which didn’t meet all their requirements or stay at a locally run paying guest accommodation which is typically operated by the residents (family) residing in that house.
In the beginning, parents trusted local PGs operated by families. Today, co-living brands aim to instill confidence in parents to trust them with their children. What seemed earlier an unorganised sector has now been brought in standardisation.
Factors contributing to its growth
- Market: The student housing has a vast market of over INR 20,000 Crore in India growing at the rate of 15%
- Migration: Trends indicate that the utilised student housing beds will be 16 Million + by 2024
- 4-5% growth in numbers of students y-o-y
- 10% increase in migration y-o-y as people moving to larger cities/ student hubs for better education
- Rising disposable incomes, global exposure, and inter-city migration
- Deficiency of campus facilities: Only 33% of the enrolled students get access to campus accommodation services. This gap between the demand and supply of this service has led to the emergence of organised market players in India
- Hassle-free options with better amenities: With the high migration rate, the globalised netizens prefer to live in a well-furnished space without impositions of an early curfew and other prohibitions.
- The organised player in the market charges typically 20-25% above the unorganised sector. However, there is a higher level of service like food, daily housekeeping, 24*7 security, common/ games room, a TV lounge, and much more
- The organised approach enables both, economies of scale as well as increasing utility per/square foot
An organised player will have 75-100+ (and Purpose Built structures of even 350-500 beds) students in one location, while an unorganised player is closer to 30-35 students. This allows the organised player to add on services and shared facilities. The organised player will also give better fit-outs in the rooms, like larger beds, thicker mattresses and larger cupboards.
This sheer difference in size enables organised operators to provide high security, use quality food ingredients, and plan community events at the same or nominally higher price form unorganised operators.
The unorganised sector will always be there, as there is still a highly price-sensitive customer. For everyone else, with the increasing exposure, demand for better services, and improving regulation (mandating specific living standards), there will be a move towards the organised sector. One can expect the organised players to scoop up somewhere between 50-60% of the market in the top 20 cities over the next 3-5 years.
This article is contributed by Nidhi Kumra, Co-founder and CEO, Your-Space
(The views expressed here are solely those of the author and do not necessarily represent or reflect the views of RoofandFloor)