New real estate trends that are expected to emerge this year
hostels or lodges work on the basic concept of co-living.
While such co-living trends have been around for several years now, they are getting more organised now. “Co-living is more than a mere bed-and-breakfast deal. There are private bedrooms with access to common shared areas like the kitchen and living room. Such spaces offer convenience and an entirely new lifestyle for young professionals,” said Anuj Puri, chairman, Anarock Property Consultants.
However, such co-living options are largely available only in metro cities. “While it is largely major cities like Bengaluru, Mumbai, Gurgaon and Pune that began promoting this concept, the demand for co-living spaces is also gradually percolating to tier II cities like Jaipur and Lucknow where both working millennials and students are increasingly opting for these spaces,” said Puri.
According to a study by Magicbricks, a real estate portal, “Co-living is a fragmented industry with most players being start-ups having formed in the last 3-4 years. Nestaway, Oyo Living, Ziffyhomes, Stayabobe, SimplyGuest, Placio, YOUROWNROOM, Rentmystay, Coho, Colive, Stanza Living, Quickr, and Zolo are the key players operating in this space.”
It will have to be seen how this new concept emerges and performs in 2019 and later.
As far as commercial real estate is concerned, co-working spaces are expected to strengthen their position in 2019. It was a new concept in India a decade ago, but not anymore. In the last few years, co-working spaces have witnessed a lot of traction and acceptability. While earlier only small businesses and individual professionals opted for it, now even larger companies are occupying co-working spaces.
“A significant change in occupier trends has been witnessed with a marked increase in the collective take up of co-working spaces,” said Ramesh Nair, CEO and country head, JLL India, a real estate consultancy firm. The share of co-working spaces in total office leasing increased to 10% in 2018 from 5% in 2017. With more supply likely to come in the near future, leasing is expected to intensify in 2019. In addition to strong demand from start-ups and small and medium enterprises (SMES), large mainstream corporates are also actively looking at these new-age office spaces, added Nair. According to CRE Matrix, a real estate research and analytic firm, during the year 2018, Smart Work Business Centre, a co-working space provider rented 18,000 sq.ft to Tata Communication. Similarly, Awfis Space Solutions, rented out 21,000 sq. ft space to Hinduja Global Solutions.
Will Reits be launched?
Many experts also believe that the first Real Estate Investment Trust (Reit) will be launched in the country in 2019. REITS was introduced in the year 2008 in India, and first draft guidelines on the subject were issued in 2013. But lack of clarity on tax implication was holding back the REITS to become a reality. But in the last few years, government has removed many hurdles.
“One of the major drivers for the growing interest of investors in the commercial office space has been the government’s move to bring in progressive modifications in India’s REIT policy in last three years, making it more market friendly. As a result, global investors have invested significant capital in acquiring large office assets for building their REIT portfolios in India,” said Samantak Das, chief economist and head - research and REIS, JLL India.