The co-living segment will offer a business opportunity of Rs 1 lakh crore by 2023 as demand for shared rental space is rising, according to a joint report by JLL and FICCI.
"The rising demand for shared renting will propel the market and offer a business opportunity of Rs 1 trillion by 2023 along with capacity of 5.7 million beds from the previous levels of Rs 458 billion and 3.6 million beds in 2018," JLL India said in a statement.
JLL and FICCI released two reports on Friday -- 'Co-Living - Reshaping Rental Housing in India' and 'Co-Working - Reshaping Indian Workplaces'.
The growing co-living and coworking segments, which continue to disrupt the traditional real estate space in the country, are set to further increase their footprint, JLL said.
The demand for shared office space from corporates, startups, and entrepreneurs has resulted in a huge jump in the coworking share in total office leasing, which has risen to 12 percent in the first quarter (January-March) of 2019 from eight percent level seen in 2018, it added.
From 2017 to the first quarter of 2019, 6.9 million sq ft of cumulative space has been absorbed by the coworking segment.
"Today, millennials constitute a majority of India's workforce. They are adaptive but expect a drastic change to occur in the way people work. Agile workplaces and a vibrant ambience helps the new workforce deliver better," FICCI Real Estate Committee Chairman Sanjay Dutt said.
"While the concept has readily been accepted in the metros, Tier-II cities are also opening up to this new concept, including Indore, Ahmedabad, Bhubaneshwar, Kochi and Jaipur," added Dutt, who is also the MD and CEO of Tata Realty and Infrastructure Limited.
Juggy Marwaha, Executive Managing Director, JLL India said, "The coworking segment has come a long way in the country and is now riding a maturity curve and getting more established."
Samantak Das, Chief Economist and Head of Research, JLL India said, "Globally, evolving nature of workplaces and human experience have become core to the office sector. Shift in perception amongst millennials to 'sharing' instead of 'owning' has made the co-living concept popular."
Coworking offers cost savings of 20-25 percent compared to traditional office space leasing. It offers attractive returns, two to four times higher than the traditional residential yield of two to three percent.
"With these two innovative segments, the Indian office and residential real estate are sure to grow bigger and better. However, stakeholders need to address existing challenges such as issues related to data privacy, the conservative approach of property owners and relevant supply observed across co-working and co-living, respectively, Das added.