WFO boosts demand for co-living space
Co-living space operators witnessing a high growth in major urban centres including Hyd, Bengaluru, Pune, Mumbai and New Delhi
Costs Shooting Up
- Prices of various facilities going up
- Demand rose by 2x in last 3 qtrs
- Return of professionals to metro cities driving demand
- Number of beds under co-living may reach 4.5 lakh in 2024
Bengaluru: As work from office (WFO) gains momentum across sectors, co-living space operators are witnessing a high growth in major urban centres including Hyderabad, Bengaluru, Pune, Mumbai, and New Delhi.
Management of co-living spaces said with young professionals joining back in their designated centres in metro cities, many operators have achieved their whole fiscal target by the end of first half of fiscal year. They also said that the trend is likely to continue despite slowdown in hiring across IT services and startups.
Such trend of work from offices has also helped co-living operators to raise prices of various facilities.
“We have raised prices by single digit across categories. That is because we saw pricing of rental apartments rising in the neighbouring regions,” Tauseef Hassan Ibrahim, Business Head of Hyderabad-based coliving operator, Boston Living told Bizz Buzz.
According to the company, work from office trend has increased demand for co-living spaces in cities, especially from young professionals.
According to real estate consultancy firm Anarock, residential rents have posted an impressive 30 per cent surge in the first nine months of 2023. This increase has been seen in the top seven cities led by Bengaluru, Hyderabad and Pune.
Bengaluru led the show with a whopping 31 per cent surge in housing rents. Hyderabad witnessed the second best rental value growth with key markets in the city seeing up to 24 per cent growth in this period.
Most of the growth in urban centres came for co-living operators as many corporates have adopted hybrid mode of working. Under this mode, many professionals have to reside at their base centres, usually in metros, for attending their offices for a few days in a week.
Against the backdrop of tight demand environment in IT services sector coupled with funding winter in startup ecosystem, many employers have started asking their employees to work from offices on all days of a week. Staffers of manufacturing, retail, financial services and related sectors have been working on physical mode post the pandemic. Recently, many IT firms have also started asking their employees to come back to offices on all five days a week. For instance, Tata Consultancy Services (TCS) has conveyed its staffers to come back to offices on all five days per week.
Such work from office trend has led to demand for more co-living spaces across major metro cities. On the back of such rising demand, the co-living segment will have 450,000 beds, driven primarily by organised players from the current 2,10,000 beds, a report by real estate consultancy firm, Colliers said.
However, hiring slump seen in the IT services and startups is likely to impact some growth bump of co-living sector during the first two quarters of next year.
