Embassy Group on Tuesday said it will invest around ₹2,000 crore to set up co-living or shared accommodation facilities across top six cities in India, targeting the growing millennial workforce and students in the country.
The Bengaluru-based real estate firm, which builds commercial office spaces, residential projects and also operates WeWork co-working offices in India, announced that it will operate its co-living business under the brand 'Olive'. It plans to launch two centres each in Bengaluru and Chennai this year with a total of 2500 beds.
"It is complimentary to what we do right now. Our office parks have about almost half million people. More than 60% of that population are migrants. Over 30 million people are moving into the metros every year. Urbanisation is growing exponentially and we want to cater to their needs of living in these cities," said Aditya Virwani, chief operating officer, Embassy Group and Co- Founder Olive, over the phone.
After the first two projects in Bengaluru and Chennai, the company plans to expand to Hyderabad, Mumbai, Pune, and Delhi National Capital Region (NCR), and also eventually take the brand overseas in the next few years. In total it plans to launch around 20,000 beds in the first phase. Each project would comprise 500-5,000 beds and would be customized with "diverse formats and priced competitively to suit respective markets." Monthly rentals for each bed would range from ₹10,000-20,000 depending on the location.
"Depending on the demand and funding, we could easily have 1 lakh beds in the next five years," Virwani said, adding that all the projects would be greenfield and has no plan to acquire any existing co-living facilities.
The group plans to invest around ₹2,000 crore primarily on acquiring land and construction of the facilities. While the initial funding would come from the group, it would also look at raising money from various investors including its existing partners to fund the business. "We are funding on our own for this year, but we will look at partnering with investment firms and raise money as we go on," Virwani said.
At present, Embassy is backed by global private equity firms Blackstone and Warburg Pincus at the group and project levels. The group has over 54 million sq. ft. of prime commercial, residential and industrial space in India. Last year, Blackstone along with Embassy launched India's first real estate investment trust (REIT).