The future of co-living spaces in Gurgaon and their potential as an investment opportunity.
Co-living was a fast-expanding niche asset class before the epidemic. However, due to the dangers of living in densely populated places as well as the expanding work-from-home (WFH) paradigm, Covid-19 has had an unmistakable influence on the general demand in urban markets. This page offers a comprehensive overview of the co-living sector, beginning with a few explanations of why it has grown so popular.
Modification of the Business Model
Experts claim that the pandemic has caused a paradigm change on the demand side of the co-living market, which has led to some co-living operators switching from an investment strategy to an operations approach. A few operators chose the aggregator business model, which is supported by IT systems and allows for listing, booking, on-call maintenance, etc. in addition to revenue sharing. While some operators embraced a hybrid business model that enabled a revenue share arrangement with landlords, others opted for the hybrid business model.
The organized sector had tenancy losses but recovered well as demand increased and businesses sought to relocate their out-of-town staff closer to their headquarters to save commuting time.
The focus on hygiene and the tightened sanitization standards would shift demand from unorganized businesses to organized ones. Furthermore, since people won’t want to spend hours traveling, there will be a tonne of potential in micro markets near workplaces and educational institutions. Additionally, the industry will be disrupted by the reliance on IT infrastructure that will provide flexibility in booking and using facilities.
Put Efficiency First
Rent reduction is one of the biggest issues facing the industry, according to a recent poll by HouseMonk, a facilities management platform. A hybrid business model and aggregator model, where operators simply charge a management fee, can be used to overcome this problem. Many operators have switched from traditional leasing to minimum guarantee plus revenue share-based leasing in recent years. However, the owner-operator model will win out as the standard business model in the end.
Furthermore, in the post-pandemic environment, the industry needs access to low-interest financing to advance toward growth. And this problem may be solved by attracting equity investment to support private equity-backed growth.
In order to draw in students and young professionals, organized players’ co-living places must be reasonably priced. In order to save costs and improve efficiency, some operators have transferred the majority of their company operations online, while some tenants are receiving benefits from renegotiated rents and new business models.
Affordable and Convenient
Community living, which entails the rental of a house to numerous tenants who share rooms, kitchens, balconies, and lounge areas, touches the very core of human existence. Having said that, the image of co-living that typically comes to mind is unlikely to reflect the reality of co-living today. Instead, it probably conjures up images of crowded quarters, protracted queues for services, frequent arguments, talkative hallways, and a setting that resembles a dormitory.
Co-living is almost as exciting as a hotel setting, offering the option to both engage with other residents and live one’s life quietly, with state-of-the-art amenities and fully furnished and serviced rooms.
By affecting psychological health factors including increased social support, a sense of belonging, physical, emotional, and financial stability, as well as reduced social isolation, co-housing can have a positive impact on health outcomes.