Sahil Vora is the Founder and Managing Director of SILA.
A prolonged slowdown in the real estate sector in the country has led to dynamic changes. The past year saw several reforms being introduced that shook the industry. To stay ahead, realtors and developers will need to constantly stay on their toes in preparation for the next big trends. In these changing times, we see the emergence of three new trends that will soon dominate this sector.
What was initially laughed at as a lifestyle choice is seeing a huge shift in commercial real estate. Co-working spaces are moving beyond single cubicle offices to optimised working solutions in several areas. These spaces are equipped with optimum office supplies while allowing for individualistic freedom. This global trend allows individuals to work in their own space while also collaborating with people of various skill sets.
Even corporates can be seen supporting this trend. With reduced overhead costs and increasing access to resources, co-working sources are not just being courted by professionals. Initially, the challenge was acquiring certain prime locations in every city for these spaces. However, with growing demand, we see an enormous rise in co-working spaces across locations. In India, the major developers and private equity funds are shifting their focus to co-working spaces as they expect uptake of the type of commercial real estate to grow exponentially over the next few years. Large commercial developers are planning their corporate parks with co-working spaces in mind at the design stage as the density in the park and requirements for infrastructure are in some cases different from a regular office.
With office spaces shifting locations, signing a ten-year lease is no longer feasible. However, companies like WeWork have no problem with this lease as they rent out their space to numerous clients. This also makes it easier for them to negotiate prime location deals as compared to a single office unit. This trend has caught on fast and India has 300-plus co-working spaces as per recent industry data, we don’t think this is sustainable and expect massive consolidation in the next 12-18 months. There will be few large pan India players and a hand full of smaller regional companies.
Airbnb brought a massive change in how tourists could look for accommodation and short-term rental solutions. These days, it isn’t just tourists but also residents that are on the look out for innovative living solutions. Living alone can be quite expensive and isolating, while dealing with a landlord on a daily basis can be exhausting.
Now individuals in a similar predicament can find a perfect place to co-live. Adding a sense of community in a ‘social media’ world, co-living solutions are becoming the new trend. Individuals from across locations can find a space with like-minded people while being independent. This is a massive shift from living in your parents’ house till you can purchase your own family home.
Even though this concept is still at a nascent stage, we see a huge opportunity for it in the future. Millennials, particularly, are eager to begin their individual lives away from their parents’ home. Co-living offers the freedom to connect with like-minded people without the responsibility of maintaining a home. For those preferring the single life, co-living spaces can offer the security and involvement that is otherwise missing.
Companies like WeLive, Nestaway, StayAbode and CoLive are pioneering this trend and receiving widespread acceptance. For instance, Nestaway allows individuals and families to choose from various accommodation options. Everything from an apartment, a room or a fully-furnished flat can be rented without dealing with a broker. While there are still no prominent global projects working on this as yet, we are confident of this trend picking up within a decade.
Real estate demands aren’t just changing for commercial spaces and younger residents. With nuclear families on the rise, senior living spaces are also going to become a requirement. The biggest barrier in India, however, remains the emotional issue of sending your parents or elder members of the family to live away from the family.
Senior living spaces are treated with the same attitude as retirement homes or assisted living spaces. In the US, Florida is a state associated with retirement and senior living. The outlook is that people of a particular age move to an area that suits their need without being abandoned. In India, however, leaving one’s home to move into another space is synonymous with abandonment. Even though the new space may offer more independence and better services.
India is still a young country; however, suitable senior living spaces will soon become a necessity and grow in demand. Senior living spaces are designed keeping the comfort and requirements of the older generation in mind. It inculcates a sense of community well-suited to that life while allowing for healthy and independent ageing. Assisted living, on the other hand, caters to individuals that are unfit or may require medical attention due to an existing health condition.
In India, spaces such as Antara in Dehradun or Athashri – Paranjape Schemes in Maharashtra are prime examples of this space. They offer comprehensive solutions that cater to all the requirements of this age. While a lot of developers are still not picking up on these projects, we expect a shift in the coming years. The changing trends and lifestyle requirements are going to see big developers and private equity firms get involved in the coming decade.
In conclusion Developers need to focus on the changing dynamics of the demographic profiles. Traditional commercial and residential solutions are not going to be the only solutions in demand. There will be new, innovative and younger players that adapt to these trends quicker than the older and larger developers; this is a good sign for the Industry in general.
The author is a Founder and Managing Director of SILA.