A new report by NOESIS, puts national co-living demand at approximately 6.6 million beds in 2025 against an organised supply of only about 300,000 beds, a gap of nearly 22 times, with organised operators serving under 5 per cent of the addressable market.
The study, The Evolution of Co-Living: Market Dynamics and Investment Potential, projects the market to grow from USD 0.53 billion in 2025 to USD 1.96 billion by 2031, a CAGR of 24.34 per cent. In rupee terms, that is a move from roughly INR 4,000 crore to close to INR 20,000 crore, with organised inventory more than tripling to nearly one million beds by 2030. Even then, penetration would sit only marginally above 10 per cent against a demand pool expected to reach 9.1 million beds.
“India keeps calling this a real estate opportunity. It is not. Co-living is an operating business that happens to occupy a building, and it behaves like one. Real estate rewards patience. Operating businesses punish inconsistency. The demand gap will get filled either way. Whether owners make money from it depends on which of those two businesses they think they are in.” Nandivardhan Jain, Founder and CEO, NOESIS
Where the demand is coming from
The report traces demand to three structural engines, all of them largely independent of consumer sentiment.
Offices and GCCs. India recorded 83.3 million sq ft of gross office leasing and 57 million sq ft of net absorption in 2025, both record levels. Global Capability Centres alone accounted for 31.4 million sq ft, or 37.7 per cent of all leasing, the highest share on record, rising further to approximately 45 per cent in H1 2026. Bengaluru hosts close to 900 GCC units, or 34 to 39 per cent of national activity, with roughly 110 new GCCs established nationally between 2024 and 2025.
Education. Higher education enrolment stands at nearly 4.5 crore students, while campus accommodation meets only about 33 per cent of an estimated 12 million-bed student living requirement.
Industry. The India Industrial Land Bank has mapped over 4,500 industrial parks across approximately 7.70 lakh hectares, including 306 plug-and-play parks and 20 NICDC-led developments under construction. This is a workforce housing pool that organised supply has barely touched.
City by city, the shortfall is severe
| City | Addressable demand (beds, approx.) | Organised supply (beds) | Gap |
|---|---|---|---|
| Hyderabad | 25,000 | 5,000 to 7,000 | 4.0x |
| Kolkata | 19,000 | 4,500 to 6,000 | 3.5x |
| Pune | 25,000 | 7,000 to 9,000 | 3.0x |
| Bengaluru | 50,000 | 18,000 to 22,000 | 2.5x |
| Ahmedabad, Gandhinagar | 15,000 | 5,500 to 7,000 | 2.5x |
| Mumbai | 72,600 | Severely constrained | n.a. |
Delhi NCR accounts for approximately 17 per cent of national demand, supported by an annual higher education intake of over 81,000 students alongside deep corporate relocation demand. In Hyderabad, existing operators capture only 15 to 20 per cent of underlying demand.
The economics: higher yield, harder operations
NOESIS positions co-living as an operating business wrapped in real estate, not a rental play.
Professionally managed co-living assets generate a revenue premium of 30 to 55 per cent over traditional single-lease residential formats. That premium comes with cost: expense ratios of 60 to 75 per cent, against 35 to 45 per cent for conventional residential assets.
Healthy operators target stabilised occupancy of 92 to 95 per cent. Asset-light models deliver NOI margins of 10 to 20 per cent. Asset-heavy ownership models deliver 30 to 40 per cent.
An illustrative 400-bed premium asset in a major technology corridor, modelled at 90 per cent occupancy and average revenue of INR 30,000 per bed per month, generates approximately INR 13.35 crore in annual revenue at a 17 per cent NOI margin under an asset-light structure. Dynamic pricing tools lift revenue per available bed by 8 to 14 per cent with no additional capital.
For the resident, the format offers a 20 to 35 per cent rental advantage over a standard 1 BHK, with brokerage, furnishing and utility setup costs removed.
“Occupancy is not the hard part. Holding 92 per cent occupancy while keeping the expense ratio below 70 per cent is the hard part, and that is where most operators lose the asset. Consistency in operations is what turns this from a rental arbitrage into a real business.”
Vijay Bhandari, Chief Operating Officer, NOESIS
One category, eight demand segments
The report cautions against treating co-living as a single product. It segments demand into eight groups: students, first-jobbers, young professionals, corporate trainees, consultants, interns, healthcare workers and migrant workforce, each with distinct tenure, price sensitivity, room-type preference and service expectations.
Two shifts stand out. Private rooms now account for 45.7 per cent of total market preference, a structural move away from the shared-dorm origins of the category. The mid-scale price band dominates at 60.2 per cent of inventory, confirming that the volume opportunity sits below the premium end.
The global context
Globally, co-living was valued at USD 7.82 billion in 2024 and is projected to reach USD 16.05 billion by 2030. Asia-Pacific is the fastest-growing region at 48 per cent year-on-year, driven substantially by Indian operators who now dominate global scale rankings.
NOESIS draws a parallel with branded residences, a category where brand has already proven measurable financial value: a 30 per cent price premium over unbranded equivalents sustained for more than a decade, in a global market moving from approximately USD 67 billion in 2025 to close to USD 118 billion by 2034. India is now among the top global markets for branded luxury residences, with 20 to 30 new projects expected by 2028 and growth of approximately 200 per cent through 2031.
The signal, the report argues, is the same in both categories. Indian residents are beginning to pay for trust, standards and management quality. Indian real estate is only starting to price that in.
