Sunshine sectors co-living, co-working and student housing have 7-11 percent higher rental yields than the 3 percent national residential average rental yield of traditional housing formats, as per a report by CII and Anarock.
"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. 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," said Anuj Puri, Chairman – 2nd CII Real Estate Confluence & Chairman - ANAROCK Group.
The report delves into these highly promising new Indian real estate asset classes and explores their growth drivers as well as the underlying opportunities for investors and other real estate stakeholders.
Data centres with a potential of 10-14 percent rental yield are drawing high investor interest. Major players prefer Mumbai, Pune and Bengaluru, the report said.
Senior housing growth primarily in top cities’ outskirts and tier-2 and 3 cities like Bhiwadi (NCR), Neral (Mumbai), Talegaon (Pune), Devanahalli (Bengaluru), Mysuru and Coimbatore, the report titled Emerging Asset Classes: The Future Looks Promising, said.
The report said that a majority of millennials today prefer co-living over traditional rental models. The top six players alone now have 1.18 lakh beds, and are drawing investments from both domestic and global institutions. From seed funding to subsequent rounds of financing, private equity players, developers and individual investors have backed this segment.
Startups have particularly benefitted from the infusion of funds and are scaling up operations in multiple cities.
While co-working as a segment has flourished in India, there are interesting differences in how local and global players address it. As of today, domestic co-working operators have restricted their presence to tier I cities, while global players are also penetrating into tier 2 and 3 cities, the report said.
Meanwhile, the government's efforts to make data localisation mandatory will ensure a promising future for data centres in the country. The Budget proposal to roll out a new policy for building data centre parks underscores the importance and relevance of this promising asset class. Currently, the major data centre companies prefer Mumbai, Pune and Bengaluru.
As many as 451 million active internet users, 1,173.75 million mobile subscribers, the rapid rise in digital transactions, Smart Cities Mission and Personal Data Protection Bill will boost demand for data centres.
The report also noted that senior living has immense potential in India largely because life expectancy here has improved to 68.8 years in 2018. Moreover, the population aged above 60 years has already breached the 100 million mark
Apart from holistically dedicated senior citizen spaces, many developers are also launching integrated townships with a proportion of units dedicated to senior living. Most of these projects will thrive in tier-2 and 3 cities.