NAREDCO in News
 
Media Room
 
Industry News
 
Articles
 
National Realty e-Magazine
 

Industry News

Select a year 


JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember                Back

 
Millennials are opting to rent but with some perks
ET Realty  |  February 13, 2019

ET Bureau New Delhi

When Shobhit Kumar Balana, 19, decided to move from a paying guest accommodation in the city’s North Campus area which cost him Rs 16,000 a month to a branded hostel that cost him Rs 20,400 a month, he worried about the money. “But my father just said, ‘Don’t worry about it,’” said Balana, a first-year student of bachelor’s in commerce.

 

Demanding millennials with disposable income — either their own, or their parents’ — are increasingly turning to professionally managed hostels and co-living over renting or staying at mom-and-pop guesthouses as paying guests. A host of services like housekeeping, Wi-Fi and emergency repairs are included in the rent, which is at a premium compared with traditional PG accommodation. Startups like StayAbode, CoHo and SimplyGuest, and established players like Oyo, have spaces in cities like Delhi, Noida, Pune and Bengaluru. Mumbai is conspicuous by its absence on this list, due to lack of availability and the high price of real estate, according to brands ET spoke to.

 

According to a December 2018 survey by real estate consultants Knight Frank, about 72% of respondents aged between 18 and 23 years were willing to consider co-living as an option for accommodation. Some of the companies offering the service, like Stanza Living which raised $10 million from Sequoia-led investors in September 2018, are positioning themselves exclusively as student accommodation providers.

 

The companies ET spoke to take entire buildings or a portion of those on lease, furnish and sub-let the space to members at a premium. Real estate owners said even though they get a lower rate from these companies compared with traditional PGs, the upkeep is better and it is easier than dealing with several different renters. When it comes to student hostels, companies may also partner with educational institutions to manage their hostels.

 

Millennials between 19 and 35 years of age form the vast chunk of customers, who use apps developed by companies to raise complaints and give feedback and get to know who else is staying with them. These apps are also used to provide access codes to the spaces. CCTVs are a norm in common areas and corridors. The lock-in periods range from nil to three months, unlike usual rental agreements which have lock-in periods of 11 months.

 

Millennials are opting to rent but with some perks While convenience is a favourable factor, the feeling of living in a community is another. “Most of the members are migrants staying away from family,” said John Jacob, associate vice president at CoHo, a Bengaluru-based co-living startup. CoHo, which has raised $3 million so far from wealthy individuals and family offices, organises weekly events like pizza-tasting sessions, poetry nights and movie screenings at its co-living spaces. Oyo’s offerings have dedicated Skype corners and phone booths for homesick millennials who want to keep in touch with family and friends, according to Kavikrut, chief growth officer at OYO Hotels & Homes, which operates rental spaces under the brand name Oyo Living.

 

At Bengaluru-based StayAbode’s spaces, there are communal kitchens that can be shared by 6-40 people, according to co-founder Viral Chhajer. High real estate prices are also driving young professionals towards renting, Chajjer said. StayAbode has raised at least two rounds of funding of undisclosed amounts in the past year.

 

As added perks, some companies offer discounts to members from food delivery, restaurant and healthcare brands via partnerships.

 

Unlike co-living spaces abroad, many companies in India separate their offerings by gender. However, unlike most PGs, people of the opposite gender can come into common spaces. In Bengaluru-based SimplyGuest’s spaces, men and women can go to each other rooms too, as long as others living in the apartment don’t have a problem with it, said co-founder Subbu Athikunte. “People don’t like restrictions or moral policing.”

 

Suresh Rangarajan, founder of CoLive, with spaces in Vellore and Coimbatore apart from Chennai and Bengaluru, said: “In PGs, privacy becomes an issue. On top of that, there is the uptight owner who imposes restrictions on you like, veg/non-veg, Hindu/Muslim. There are also questionable looks that follow your love life, whether it is with the opposite or the same gender.”

 

According to Anindya Dutta, co-founder of Stanza Living, the lack of professionalisation in student hostels has helped them. “The government’s focus on higher education and increased Internet penetration, which is driving greater awareness among students, who now want to go to the metros to study, has also helped,” he said.