Leading realty firm Embassy Group on Tuesday announced an investment of up to Rs 1,000 crore to develop six greenfield co-living properties across major cities to meet the growing need of shared rental homes for students and co-living professionals.
Bengaluru-based Embassy Group, which last year launched India's first real estate investment trust (REIT) and runs co-working business WeWork India, will operate co-living business under a separate firm 'Olive by Embassy'.
"We are launching a new firm and brand 'Olive' for our co-living business which is now emerging as a separate asset class. The objective is to disrupt the PG (accommodation) market which is unorganised and poorly managed," Embassy group Chief Operating Officer Aditya Virwani told PTI.
The company has identified two land parcels to develop co-living centres in Bengaluru and Chennai, said Virwani, who is also co-founder of Olive.
"We are targeting to start development of 5-6 greenfield co-living properties this year with capacity of 5,000-10,000 beds," he said, adding that the company would operate in a price range of Rs 10,000-20,000 per bed.
The first centre is expected to be operational by middle of the next year.
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Asked about investment, Virwani said the total project cost could be around Rs 800-1,000 crore, including land cost. Embassy group would invest fund in the co-living business.
"We will go to the market to raise funds after establishing the brand," he said.
The company plans to expand co-living business in cities like Hyderabad, Mumbai, Pune and Delhi NCR. The first phase will see the launch of 20,000 beds -- Bengaluru 15,000, Chennai 2500 and Pune 2500. It is also open to tie up with land owners to develop co-living centres.
Virwani said the yield in co-living business is almost similar to commercial properties of 7-8 per cent.
"The shared economy concept has percolated all aspects of society, creating unprecedented disruptions as well as opportunities.
"Today, it is not just the scarcity of spaces or living in congestion that are driving co-living but also the affordability and flexibility, aspirations of the current generation, transition from owning to sharing, the digital economy and the technological innovation," Virwani said.
Stating that there are over 36 million students in higher education and the migrant millennial workforce is growing at a rapid pace across metros, he said Olive by Embassy aims to uplift the standard of living for this segment with hospitality services and an eco-system.
The co-living projects are designed and developed by the UK-based design consultancy Priestman Goode.
On Monday, realty portal Housing.com said the co-living market will double to Rs 2 lakh crore by 2023.
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