'Co-living, co-working gets higher rents than traditional realty'
Emerging real estate formats, co-living, student housing and co-working garner higher rental yields of 7-11 per cent, compared to 3 per cent yield in conventional housing, according to a report by CII and Anarock Property Consultants.
Anuj Puri, Chairman, Anarock Property Consultants said: "Co-living, student housing and coworking have rental yields of anywhere between 7-11 per cent, a significant step-up from the 3 per cent national average rental yield of traditional housing formats. Co-living, student housing and senior living are the next evolutionary step in the residential real estate domain, while co-working has evolved from traditional office real estate."
He added that the drivers behind this evolution are changing social dynamics, a highly enabled start-up environment, rising interest in higher education by migratory student population, and the need for quality housing solutions for senior citizens.
"Co-living, student housing and senior living are fundamentally innovative and specialised residential assets, but with varied business models," Puri said.
The report further said that the top six co-living players currently have 1.18 lakh beds priced between Rs 6,000-30,000 per month. Regarding the co-working segment, it said that domestic co-working operators are currently present only in tier-I cities while global players are penetrating into tier-II and tier-III cities.
"A majority of millennials prefer co-living over traditional rental models as they do not have to deal lack of standard practices for security deposits, notice periods and monthly rentals," said the report titled "Emerging Asset Classes: The Future Looks Promising".
For homeowners too, the low rental yields have pushed the need for new models higher than ever, especially as many of them are bearing EMI payments for several years, it said
"Young professionals migrating to metropolitan cities are not keen on the traditional rental model that entails inconsistent rents, high brokerage, nosy landlords and rule imposition. Instead of spending a big share of their wallets on renting their own space they are more inclined towards sharing living space at a fraction of that cost," said th report.
On the growth of housing for senior citizens, the report said that growth can primarily be seen in outskirts of top cities and tier II and III cities like Bhiwadi (NCR), Neral (Mumbai), Talegaon (Pune), Devanahalli (Bengaluru), Mysuru and Coimbatore.-IANS