Mumbai has been ranked 5th of the 20 cities in the Asia Pacific that could emerge as a robust co- living destination, according to major industry experts like Knight Frank. New Delhi has been ranked the 11 and Bangalore 19th, which are the two other cities on the list. The 5th ranking of Mumbai definitely marks it as a possible successful market as a co- living destination. Other cities on the list were Tokyo, Beijing, Hong Kong and Shanghai.
Key Attributes for Rankings
The 20 major Asia Pacific cities were classified according to six key attributes and they are conducive for the growth of co- living spaces.
These six attributes are:
· Tech and financial hub
· Venture capital deals and growth
· Affordability of housing
· University population
· General population
· Human development index and quality of life
Mumbai came up with an average score of 65.94 across six parameters and has emerged as the top city for co- living in India in spite of the higher prices and rapid and continuous gentrification. It has the unchallenged position of being the top economic centre in the country and provides scope for the growth of co- living. There is quite an impressive number of job opportunities in the city and the low housing affordability has become major driving factors. There is a 55% weightage as per the co- living index. The fact that the city has a very large population is also another major factor which offers scope for market penetration by co- living entrepreneurs.
Major trends to be noted
Moreover, there was a 288% increase in venture capital deals in the city which had been significant for the quality of job creation that have resulted in growth opportunities for the co- living sector. New Delhi was ranked 11th on the list with a score of 53 and Bangalore was the third city. Considering the fact that co-living had experienced a rapid increase across markets and had been a major disrupter for markets across the world, it just goes to show how lifestyle preferences are changing. With housing prices increased over major economic centres, the co-living space would provide affordable housing options for the moving or temporary workforce. This urban form of housing is not a new concept entirely as other forms of shared spaces are very much in vogue like hotels, serviced apartments, hostels and the like.
Why co-living works
Co-living spaces are built on similar models but they have a more curated social environment that aims at community building through three kinds of characteristics lie events, community and shared spaces. The rise of venture capital in Mumbai was a key indicator of the good job quality that were created in the financial hub and that there was a ready demographic pool in place to which the co- living operators could easily cater to. This was more due to the fact that there was a shortage of quality rental housing near the employment hubs. Although New Delhi had a higher housing affordability than Mumbai, the general population and human development index is higher than Mumbai and that makes it perfect for expansion. Mumbai ranked higher because these factors were already in place. New Delhi also happens to attract both internal as well as external migration of capital and people because it is the political capital of India. Bangalore, on the other hand, was ranked on the list because it has access to talent, as well as has a conducive and self sustaining business environment as well. It also has a very good start up ecosystem that supports the gig economy and is a likely market where co- living could thrive. The city is currently attracting digital monads and the co-living capacities are continuously augmented that are expanding in the suburban and the peripheral locations as well because of the growing demand pool.
One of the most developed of the co-living sectors in the world is China and the phenomenon started there as early as 2010. Beijing was ranked first in the index and Tokyo came second and Shanghai stood third. In India, the concept of co-living is still in its phase of gaining acceptance and some new models have been brought to the forefront with the private rental sector. There is a vast globalised workforce and lack of affordable housing and co-living is becoming the choice of the millennials who want quality living at affordable rates. As a result, many investors are taking note of this emerging sector and are on the lookout for diversifying their port folio. The proposed Model Tenancy Act will also provide the required legal framework for this form of living to take shape across Indian cities.
Embassy Group lines up major investment in this segment
The property developer Embassy Group wants to invest in co-living spaces through EPDPL Co-Living Pvt Ltd so that it can cater to the growing millennial workforce and student body and also offer housing options to the corporate workforce for their own employees across the cities. It will start a new venture consisting of 20,000 beds on its existing land portfolio and it has goals of growing and operating 1,00,000 beds in five years. The brand is also gearing up for an official launch at the end of 2019 for their flagship project in Bangalore and then the next one at Pune. The company is also in talks of acquiring some land in Gurgaon.
The goal and concept of the Embassy Group is to provide standard of living and quality hospitality services in this segment. The brand has passed the last couple of years doing extensive research to understand what the clients will be looking for. This will also complement the core business of building office parks, where about half a million people would be working and they would need housing facilities in turn. There are also more than 35 million students pursuing higher education in other cities and the migrant millennial workforce is also increasing very quickly. This is the opportune moment to cater to the increasing demand of co-living and create accommodation for them across the country. The co- living space is still a fragmented market but there are start-ups like CoHo, Oyo, Nestaway among others performing in select cities. Even traditional developers like Puravankara Ltd are exploring the concept and want to bank in on the popularity of this kind of living, parallel to their residential business and rental income.
The Embassy Group will bring the best of global co-living practices and it will be combined with elegant design, sustainable living and green initiatives, along with paying special attention to high security and will be custom made according to the needs of the target customer base. A full type Embassy co- living facility will have 800 to 1000 beds while smaller ventures will have 300 beds. All the living places will also comply with the global health and safety standards and will have the latest of amenities, entertainment and development facilities. The Embassy Group has partnered with We Co, an American firm to work under WeWork brand and they have had a good run in India so far with revenue returns. WeWork had entered the market in 2016 and at present there are 23 co- working centres of which nine each are in Bangalore and Mumbai and the another five in Gurgaon and there are 39,000 seats between them.