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'Co-living, co-working gets higher rents than traditional realty'
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SME Times News Bureau | 20 Feb, 2020
Emerging real estate formats,
co-living, student housing and co-working garner higher rental yields of
7-11 per cent, compared to 3 per cent yield in conventional housing,
according to a report by CII and Anarock Property Consultants.
Anuj
Puri, Chairman, Anarock Property Consultants said: "Co-living, student
housing and coworking have rental yields of anywhere between 7-11 per
cent, a significant step-up from the 3 per cent national average rental
yield of traditional housing formats. 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."
He added that 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.
"Co-living,
student housing and senior living are fundamentally innovative and
specialised residential assets, but with varied business models," Puri
said.
The report further said that the top six co-living players
currently have 1.18 lakh beds priced between Rs 6,000-30,000 per month.
Regarding the co-working segment, it said that domestic co-working
operators are currently present only in tier-I cities while global
players are penetrating into tier-II and tier-III cities.
"A
majority of millennials prefer co-living over traditional rental models
as they do not have to deal lack of standard practices for security
deposits, notice periods and monthly rentals," said the report titled
"Emerging Asset Classes: The Future Looks Promising".
For
homeowners too, the low rental yields have pushed the need for new
models higher than ever, especially as many of them are bearing EMI
payments for several years, it said
"Young professionals
migrating to metropolitan cities are not keen on the traditional rental
model that entails inconsistent rents, high brokerage, nosy landlords
and rule imposition. Instead of spending a big share of their wallets on
renting their own space they are more inclined towards sharing living
space at a fraction of that cost," said th report.
On the growth
of housing for senior citizens, the report said that growth can
primarily be seen in outskirts of top cities and tier II and III cities
like Bhiwadi (NCR), Neral (Mumbai), Talegaon (Pune), Devanahalli
(Bengaluru), Mysuru and Coimbatore.
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