Creating a home away from home

When college student Varsha Prasad moved to Bengaluru from Patna to study in a city college, she was a tad apprehensive about finding a good place to stay. A quick online check and she bagged a bed for about Rs 13,000 a month at a student co-living centre, close to her college, complete with amenities such as three homely meals a day, air conditioning, Wi-Fi access, swimming pool and so on. “I find it very safe and do not have to worry about issues such as laundry, general upkeep and other related activities. We also have seminars, meetups and so on at the space, which make living here far more comfortable than a hostel.”

As more and more Indians migrate across the country, in search of better jobs and educational opportunities, co-living, especially in the student living space has become very popular among investors and customers alike. The monthly rentals in these spaces range from Rs 9,500 to Rs 18,000 or upwards, depending on the facilities they offer.

Companies such as Oxfordcaps (6,000 beds), Stanza Living (15,000 beds) and Oyo Life (10,000+ beds) are among the main players in the space.

Data by property consulting firm Anarock, says that Sequoia Capital invested $10 million in Delhi-based student accommodation platform, Stanza Living, in 2018. Goldman Sachs and HDFC were also key contributors to student housing last year, solidifying interest of global investors in this new and upcoming segment.

The report also states that Warburg Pincus, a global Private Equity fund, and mid-market chain, Lemon Tree Hotels, set up a JV in late 2018 to create the first co-living platform focusing on the development of affordable and conveniently located spaces for students and young working professionals across major educational clusters and key office markets in India. Another major player in the student living segment, Oxfordcaps recently received an infusion of about $8 million (about Rs 56 crore) from multiple investors. Major players such as Oyo and Nestaway also operate in this segment. Most of these spaces offer students comfortable beds, customised amenities that include air conditioning, Wi-Fi access, round the clock security and so on, a far cry from dingy rooms and stuffy paying guest accommodations, that most students and young professionals depend on.

Anindya Datta, co-founder of Stanza living, a major player in the segment says, “We feel that the entry of professionally-managed student housing companies will challenge the infrastructure and service-quality gaps that the student housing sector has historically been riddled with. The sector will continue to grow robustly, driven by migrant-student demand that is expected to echo the growth in higher education avenues.”

Huge shortage

He adds, “Of the 36 million students who migrate for education opportunities, over 11 million need housing, since colleges lack the bandwidth to offer accommodation to everyone. We have 15,000 beds across the country and are planning to scale up soon. It is the key educational hubs such as Delhi NCR, Bengaluru, Hyderabad and Pune that are seeing a lot of interest in this space.”

Most of these student co-living spaces are situated in close proximity to educational hubs in cities. In Bengaluru for instance, Datta points out, “Our residences are located in Bannerghatta, Koramangala, Yelahanka, Mathikere and Electronic city.”

This is an assessment Rohit Kapoor, CEO, New Real Estate Businesses, Oyo agrees with. “There is an untapped demand of 60 million beds currently and this creates a huge opportunity for companies and start-ups operating in the area. With OYO Life, we offer essential amenities like Wi-Fi connectivity, television, regular housekeeping, power backup, CCTV surveillance, and 24/7 care-taking. We are in 260 buildings, have more than 10,000 beds and are adding more than 3,000 beds every month.”

For many service providers in this space, technology is playing a vital role as an enabler for better management.

Suresh Rangarajan, founder of co-living space, Co Live, says, “We have adopted technology at a large scale in access control management engine (IoT based proprietary access control technology), centralised security monitoring ( IoT based video surveillance), Smart home operating and networking assistance (SHONA)- (AI based assistance for customer service and concierge). Living space providers have app-enabled services like hassle-free rent payments, property exploration and evaluation services.”

He adds, “There is a need to build a strong sense of community where new friendships and relationships can foster. Co-living is creating a fresh mode of accommodation with an emphasis on improving the issues of loneliness and creating better community relationships.”

Murali T, partner and head, Startups PWC, says that at this juncture, primarily, co-living is a real estate play. “The new players are offering many new facilities and amenities that one would not get in a regular accommodation. Since colleges are not specialised in the task of offering accommodation, this is an area that these players have tapped into. These spaces are very similar to co-working spaces such as WeWork, with multiple amenities and so on. These spaces are different from general co-living spaces since they have a captive user base.”

Comments (+)