Big-tech companies will drive co-living segment occupancy, experts say

High-attrition in big-tech companies and a prolonged work from home (WFH) arrangement could continue to impact co-living spaces on an average, even as the segment has been witnessing a 70 per cent occupancy rate across India since Q4 2021. 

A report released by Colliers on the co-living segment had earlier predicted that co-living accommodation is likely to shoot up to 4,50,000 beds by 2024 as opposed to 2,10,000 beds by end of 2021. 

Co-living promoters claim that the post-pandemic ‘back to work’ push will only fetch results with a streamlining of WFH and hybrid formats by companies. Simultaneously, research also showed how students increasingly shifting to co-living arrangements in place of hostel or paying guest arrangements - has helped fill the gap for many co-living spaces as well.  

“We are full up to 70 per cent currently, our occupancy is a lot dependent on the employment patterns of the big-tech companies, we hope that occupancy will pick up in few months from now,” Nikhil Sikri, co-founder and CEO of Zolo Stays told Business Today. Zolo has around 50,000 beds with a presence in all metros and is considered the largest operator in India in the co-living space. 

The bigger player would still have an edge over the medium and small players predicts Anuj Puri, chairman, Anarock: “Post-pandemic, we are seeing demand go up particularly for branded players, more so because there is greater emphasis on hygiene and safety. Prominent start-ups such as Oyo Living, Nestaway, CoHo living and others will have an edge over smaller players. Besides offering flexibility, comfort, affordable rentals and tech-enabled living in a plug-and-play environment, these branded players look far more promising as far as maintaining hygiene and sanitation is concerned. With access to institutional finance, many branded players may not just scale up their operations but also provide a range of options and services to suit present day requirements.” 

The gap would ultimately fill up for co-living segments as work-from-office resumes across the board. 

“Several large corporates including KPMG, Deloitte, Cognizant, ITC, RPG Group, and others have begun calling back their employees or are in the process of doing so. In the wake of this gradual shift to work-from-office, residential rentals, and demand in most of the prominent areas of top cities are also back to pre-COVID levels,” Puri added. 

Anarock reports show that the back-to-office trend bodes well for commercial real estate as monthly rentals across seven cities saw a one per cent rise against the preceding fiscal. 

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