Co-Living Has An Edge Over Traditional Rental Format: CEO, Real Estate Business, OYO

With a number of players reinventing the idea of the traditional rented accommodation and packaging it to suit the millennial population’s requirements, the concept of co-living has become quite widely known these days. While the idea may have sparked from the traditional rent concept, the plan is to bring together an unorganised sector and infuse it with lifestyle-enriching amenities.

In a conversation with Sneha Sharon Mammen, Rohit Kapoor, chief executive officer, new real estate businesses, OYO, says that co-living has an edge over the traditional leasing pattern and this gave birth to OYO LIFE.

Here are the edited excerpts from the interview.

Q: How is renting different from co-living and how does it redefine the dynamics?

A: The concept of co-living is derived from the renting philosophy that millennials ascribe to, where they are willing to share living spaces, utilities, etc., in order to make an affordable rental decision and be part of a community. Co-living, also commonly known as community living, allows residents to mingle and interact with like-minded individuals.

The co-living trend is a driving force for the organised rental markets in cities which are hotspots for young people pursuing professional and academic goals. Traditional renting, however, is more of a long-term living solution where the tenant pays rent on agreed-upon terms mentioned in the lease agreement, and has the entire place to himself and his family. While traditional renting ensures privacy and ownership, it does, however, bring its own set of woes like lock-in periods, security deposits, investing in buying furniture and amenities, monthly maintenance to ensure the safety and security of the place, etc.

That is where the trend of co-living is gaining edge over traditional renting. It not only gives people freedom and space but also eliminates the hassles of dealing with brokers, brokerage, lock-in periods, houses with little or no amenities, maintenance charges and housekeeping and security which can be a costly affair.

Q: So far, the rental market has been highly unorganised and players and analysts have just begun to see the demand from various sets of people. How do you estimate this demand?

A: India is a $50-billion housing market which includes 15 million migrant students and 40 million migrant professionals. There is an untapped demand of 60 million beds currently and this creates a huge opportunity for companies and start-ups operating in the space.

One of the big reasons for co-living being high in demand, is the fact that co-living facilities have enabled youngsters/millennials to live in newly-furnished spaces with a range of amenities at an affordable cost. Having said that, co-living is still at its nascent stage in India, even though the concept is not new to the young workforce. Even though start-ups are revamping the sector, the market is still unorganised and is mostly focused in the metropolitan cities. While there is scope to meet this huge demand, basis the tremendous response we have received across age groups, we are optimistic that its potential for growth in the future is immense.

Q: Millennials and Gen Z value their social time. How will co-living and co-working facilitate this?

A: Co-living is all about community and collaboration. By bringing similar groups of millennials and professionals together for a hassle-free, networking and facilities-rich rental experience, co-living is altering the long-term paradigm. As a modern, shared long-term rental housing option that allows residents to not only share their living space with one another but also interact and engage, co-living focuses more on connection and circular lifestyles rather than just sharing the cost of living. While co-living settings involve people living under one roof from different walks of life and offer plenty of opportunities for collaboration and community bonding, it also gives enough and the much-needed quiet time and privacy.

The smart use of space makes co-living a perfect combination of socialisation and privacy for the millennials. This is precisely one of the key reasons why co-living facilities are designed in a way that it exhibits efficiency and convenience, and at the same time ensures guest privacy.

Q: Given the professionalism behind co-living service providers, what is the premium that co-sharers will need to expect?

A: OYO LIFE is targeted at millennials and young professionals in search of fully-managed homes on long-term rentals, at affordable prices. Under this category, OYO offers end-to-end managed, comfortable, high-quality living experience that eliminates the hassles of finding, accessing and managing everyday housing. Staying at an OYO LIFE property costs as low as Rs 7,999 (in some cases, depending on the location and size of the room in terms of sharing - prices can be as low as Rs 5,999) per bed, per month for a fully managed shared living space. OYO LIFE accommodation provides essential amenities like Wi-Fi connectivity, television, regular housekeeping, power backup, CCTV surveillance, and 24/7 caretaking.

Q: How is OYO LIFE going to cater to its audience?

A:  With OYO LIFE, a customer has to only move in with their bags into a private room that’s part of a larger shared home that includes furniture, utilities, thoughtfully designed spaces, scheduled and on-demand cleaning and maintenance. OYO LIFE primarily caters to working professionals and students who have moved to a new city.

Since our launch in October 2018, we have more than 500 buildings, 25,000 live beds and we are adding 3000+ new beds every month. Right now, we are operating across Delhi-national capital region, Pune and Bengaluru and we are planning to expand to Hyderabad, Chennai, Kolkata and Mumbai.

Q: What are the challenges that you hope to address? 

A: While the demand is rising for co-living spaces, proximity to workplaces in metro cities can be challenging. OYO LIFE predominantly caters to working professionals and first jobbers and hence, identifies locations that are close to business hubs in business districts in the cities where we currently operate. Similarly, working with stakeholders like builders, local administration, unorganised sector workforce in transformation and renovation work, can be time-consuming as they first need to understand the concept. This is where technology has played an important role for us and helped us immensely.

We use innovative technology solutions to facilitate standardisation of services, amenities and in-room experience, thereby helping maintain service standards. The median time for the entire process from identifying to making it ready-to-rent is 18 days for us. This has helped us to onboard two buildings every day on average, over the past few months.

Q: With co-working, co-living setups coming up, there would be a need for a lot of allied industries to polish their professionalism. What kind of jobs and service providers do you see stepping up their game?

A: Our capability-led model allows us to undertake a 360-degree transformation and renovation while upgrading the existing structure of the asset - from flooring, plumbing, air conditioning, painting, electrical fixtures to utilities upgrade. We use innovative technology solutions to facilitate standardisation of services, amenities and in-building experience, thereby, helping maintain service standards.