Shapoorji Pallonji Real Estate plans to start shared living and student housing projects to diversify its portfolio and capitalise on an alternative asset class targeted at millennials who rely on renting instead of owning homes, a top executive said .
The Shapoorji Pallonji group firm, which builds luxury to mid-income homes, will build the co-living projects in Pune and Mumbai Metropolitan Region starting next year.
“We will start co-living and student housing projects in a measured but serious manner as an offshoot of our projects. Over the next decade, we see a huge potential because of the demographics, increased work from home and rising spend on education, and there are not many organized players. In the mid-to-long term, it has to be rolled out as a separate business, and partnered with an investor to scale up,” Venkatesh Gopalkrishnan, chief executive officer of Shapoorji Pallonji Real Estate, said in an interview.
The Mumbai-based company ranks among a handful of mainstream real estate developers who have ventured into the co-living space, dominated by investor-backed startups.
Earlier this year, Bengaluru-based real estate firm Embassy Group launched co-living business Olive by Embassy, targeting a growing, young working population in metros. This month, it also launched its service residences brand, ‘Olive Residences’, under an asset-light management model, in which Embassy will manage the property and earn on a revenue- and profit-sharing basis. Under the new brand, it plans to launch 100 buildings by the 2021-end.
Aditya Virwani, chief operating officer of Embassy Group, said this is an agile and scalable model with smaller properties that can be taken over from hotels or other co-living operators and managed for a fee.
Shapoorji Pallonji Real Estate has nearly 1,000 acres in and around Pune and Mumbai, with 600 acres of buildable area. Of this, it plans to do plotted development on about 100 acres, where it will build and sell villas or row houses on plots of land.