June 25, 2020: Real estate developers and co-living players are discussing the best way to make use of the unsold housing societies by converting them into a co-living facilities. It would reduce the burden of unsold inventory on developers.
According to industry veterans, co-living revenue shared opportunities could increase, with developers looking to monetize their unsold assets.
For the co-living operators, it is a brilliant opportunity as they will not have to invest in construction of the building. It’s a solution that would suit both the developers and players in the co-living segment. Managed living offers developers the potential to earn higher yields on their assets.
Stanza Living, a manager accommodation provider said that it has been receiving requests from developer to take the building and convert it into a co-living facility.
Talks are already underway between couple of reputed players on each side for a profitable collaboration. It would cater to the accommodation needs of the young migrant millennials including students and working professionals. Many of those would be built-to-suit projects while others would be converting existing inventory into managed accommodation options.
According to a report by EY India, the student housing sector may consolidate in the next few months, with some smaller operators exiting, resulting in stronger operators with sustainable financial and operational model.
The unsold inventory is a big challenge in the ‘new normal’, so the solutions will have to be in sync with it. So, in terms of efficiency and being cost-effective, co-living spaces will work out as one of the possible solutions to unsold inventory.