Co-living firms join hands with build-to-suit property developers to push revenue

Union Living is offering 500 beds in Mumbai and Pune. By June, its operational co-living beds are set to increase to 1,500 across nine properties in the two cities.

The demand for co-living spaces and BTS properties has been steadily increasing, driven by factors such as urbanisation, increasing student and working professional populations, and changing lifestyle preferences.

Yogesh Mehra, CEO of Tribe co-living and student accommodation, said that with the hybrid hospitality model, there is a need to design purpose-built products to maximise space utilisation and provide the best living experience for short and long stays.

“Since built-to-suit products are purpose-built, we see almost 25-30% higher revenue due to better space utilisation and higher occupancy because of purpose-designed amenities,” he said.

Sunny Garg, CEO of Crib, said the integration of technology has become essential for the efficient and effective management of these properties. “In recent quarters, there has been a noticeable trend among various enterprises, including co-living operators, hostels, and service apartments, towards embracing technology on a large scale,” he said.

According to a report by JLL India, the co-living market in the country is expected to grow at a compound annual growth rate of 17% in the next five years to nearly $40 billion (about Rs 3.3 lakh crore ).

BTS properties offer benefits to both landlords and operators. Make-shift residential or hotel properties often suffer from wasted space that may not be necessary for co-living customers.

“We observe a demand for at least one million beds in the short-stay mid-luxury segment and the long-stay segment. This demand is driven by corporates, working professionals, travellers and students in tier-1 and tier-2 cities, as well as travel and religious destinations,” said Mehra.

Abhishek Tripathi, co-founder of Settl, said the co-living sector in India is rapidly evolving, with operators adopting new offerings to meet the needs of residents. “We primarily cater to working professionals aged between 25-35 years, continuously striving to enhance our offerings in line with their demands and requirements,” he said.