With a vast globalised workforce and lack of affordable housing, co-living has become an ideal choice for many millennials.
Mumbai occupies the fifth position in the Asia Pacific Co-living Index by Knight Frank while New Delhi is ranked 11th and Bengaluru 19th.
Beijing, Tokyo, Shanghai and Hong Kong occupy the top four slots.
The report titled 'Insights on Co-living – An Asia-Pacific Perspective' covers 20 major Asia-Pacific cities classified into six key attributes likely to contribute in fostering the growth of co-living within each Asia-Pacific city: Tech & Financial Hub, Venture Capital Deals & Growth, Housing Affordability, University Population, General Population & Human Development Index, and Quality of Life.
With a weighted average score of 65.94 across six basic parameters, Mumbai has emerged as the top potential market for co-living in India due to higher prices, rapid and continuous gentrification as well as its unchallenged position as India's top economic centre, offering vast opportunities for growth of the co-living sector, the report said.
As compared to 2010-2012, the venture capital deal flow in Mumbai spiked by 288 percent in the period between 2015-17. The rise in deal flow is a key indicator of the quality of job opportunities which are being created in the financial hub and a ready demographic pool which the co-living operators can cater to, given the omnipresent shortage of quality rental housing dwellings near employment hubs, the report said.
Despite a relatively higher housing affordability than Mumbai, the general population and human development index in New Delhi is much higher than that of Mumbai, making it an apt choice for co-living operators to expand in as this is a key demand driver. Being the national capital of India, New Delhi attracts both the internal and external migration of capital and people, which bodes well for co-living sector's expansion going forward.
Being a prime technological hub, Bengaluru not only has access to talent but also a conducive and self-sustaining business environment and a vibrant start-up ecosystem supporting the gig economy due to which the city features at 19th position on the said index where the co-living sector can thrive.
Co-living operators in India, having recognized Bengaluru’s relevance to attract digital nomads early on, are continually augmenting capacities in their co-living communities and are also expanding in suburban and peripheral locations to cater to the burgeoning demand from this growing talent pool, the report said.
"In India, the co-living concept is gaining widespread acceptance and has brought to the forefront some new models in the private rental sector. With a vast globalised workforce and lack of affordable housing, co-living has become an ideal choice to many millennials.
"The growing interest for co-living spaces in cities has been instrumental in many investors sitting up and taking notice of this emerging sector to diversify their portfolio and risk. Further, the proposed Model Tenancy Act will provide the right legal framework for the growth of co-Living in Indian cities, which already has a strong demand base," said Shishir Baijal, Chairman & Managing Director, Knight Frank India.
Co-living, the new mantra within the ambit of alternative asset classes, is a form of housing which combines private living spaces with shared communal facilities. The idea of co-living is to create a community-centred environment that not only provides privacy in living arrangements but also promotes social contact through community events.
As an asset class, co-living seeks to build a community centred around 'real socialising' in a world where social media platforms, such as Facebook and Instagram, are the virtual alternatives for socialising for millennials.The biggest driving force behind the rising popularity of co-living spaces are the young renters moving to new cities for job prospects who are looking to meet and connect with new people. In India, the co-living concept is gaining widespread acceptance and has brought to the fore some new models in the private rental sector. Though the concept is novel, it is here to stay, as India’s millennial population currently accounts for 440 million.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.