GenZ, millennials shift towards co-living spaces; players plan expansions

Business Standard

6 days ago

As the market moves away from traditional paying guest (PG) accommodations, co-living operators in Bengaluru are witnessing a surge in demand from Gen Z and millennials, particularly in the age group of 21 to 27 years, seeking cheap flexible stays, enhanced safety and premium amenities.
In the city, the trend has been further accelerated by closure of 200 to 300 PGs due to stricter Bruhat Bengaluru Mahanagara Palike (BBMP) regulations, coupled with layoffs in the IT sector, prompting entry-level professionals to opt for co-living.
'Co-living facilities offer a more structured, all-inclusive living experience with fully furnished ready-to-move-in spaces at affordable rentals. This offsets the relatively lower rentals offered by traditional PGs and has contributed to the growing preference for co-living facilities in Bengaluru,' Vimal Nadar, national director and head of research, Colliers India said.
'The closure of 200 to 300 PGs across Bengaluru due to legal and regulatory non-compliance has significantly boosted demand for our co-living offerings, and that momentum is only growing,' said Jitendra Jagadev, chief executive officer, Nestaway and HelloWorld, which offer co-living and student housing accommodations with value-added services, like housekeeping, maintenance, and fully furnished rooms.
Nestaway and HelloWorld together have 1,000 beds, which they plan to double over the next two years.
Co-living accommodations offer WiFi, housekeeping, dedicated coworking spaces, kitchen areas, laundry rooms, recreational areas, gaming zones, fitness areas, 24/7 security, and curated community events.
The rents typically include access to shared amenities, utilities, housekeeping, and basic furnishings. In contrast, apartment rentals usually exclude utility and maintenance charges. As a result, the overall cost of accommodation in a given locality is generally lower for co-living facilities compared to similar apartment rentals. Additionally, flexible stay durations and minimal upfront costs make co-living an attractive option for many tenants. Most co-living operators are maintaining an average rate of 85–90 per cent. Rental prices at Colive, Trulive, Nestaway, and HelloWorld range from ₹10,000 to ₹35,000 per month, depending on the type of accommodation—whether private or shared.
Rami Kaushal, managing director, Consulting & Valuation Services, India, Middle East & Africa, CBRE said, 'Co-living is also helping people avoid making a long-term financial commitment to a particular city, such as paying hefty security deposits for rent or EMIs for buying homes.'
CBRE noted that some of the micro-markets in Bengaluru, such as Thanisandra, RT Nagar, Mahadevapura, Hoodi, and Banaswadi, have witnessed growing traction for co-living spaces. The average monthly rent for a double-occupancy room in co-living setups ranges from ₹12,000 to ₹14,500, whereas traditional PG accommodations in these areas typically range between ₹8,000 and ₹10,000.
Bengaluru is home to several leading co-living operators in India, including Stanza Living, Zolo Stays, Colive, Hello World, Settl, Coho, Covie, Yello Living, and Olive Living. Markets like Mumbai, Pune and Hyderabad are also seeing a rise in co-living spaces, said experts.
Suresh Rangarajan, founder and CEO of Sattva-backed Colive, however, noted that availability of quality co-living spaces remains a challenge in many other cities. Colive operates around 15,000 beds in Bengaluru and plans to add another 7,000 by the end of 2025.
Rohit Reddy, co-founder and CEO of Chennai-based Truliv said that PG accommodation was not seeing enough traction, while co-living options were rising in numbers, more so in the post-pandemic period, giving customers the confidence to explore the organised and experience-driven stays. The company is looking to tap into Bengaluru's IT hub with 1,500 beds.
Commenting on the demographic mix in Bengaluru's co-living spaces, Jagadev said, 'Around 40 per cent of our residents are entry-level professionals, 35 per cent are students, and the remaining 25 per cent comprise mid-level executives and digital nomads. We're seeing a growing share of remote workers, reflecting Bengaluru's rise as a hub for flexible work culture.'
According to a May report by Colliers, the co-living segment is gaining strong traction across India, with inventory expected to reach one million beds by 2030. Market penetration is projected to rise from 5 per cent in 2025 to over 10 per cent by 2030. The sector could grow multifold, potentially reaching a market size of ₹20,000 crore by the end of the decade.
Commenting on the market beyond Bengaluru, Nestaways and Helloworld's Jagadev further noted that he sees a similar trend in other parts of the country, like Mumbai, Pune and Hyderabad.
However, Colive's Rangarajan said, 'We are observing a similar trend in Pune, but the availability of quality co-living spaces remains a challenge in many other cities.'
CBRE further highlighted that India is witnessing a shift from traditional PGs to professionally-managed co-living spaces across major cities, driven by the young population and digital workforce, who seek more than just basic accommodation. Moreover, these spaces build a sense of community and networking opportunities.