EMERGING

RESIDENTIAL
NICHE PRODUCTS
JULY 2018
BANGALORE | CHENNAI | HYDERABAD
EXECUTIVE
SUMMARY
India’s property market sales are expected to grow at an average compound rate of 16% in the next five years. The residential
sector accounts for 80% of this market and the demand for residential units is driven by demographic dividend, urbanisation,
migration, increased household income and smaller household size. Maturing residential markets across Tier I cities, are
moving towards product differentiation based on the needs and preferences of various generational cohorts. This report looks
into the alternate real estate assets emerging based on the lifestyle requirements, experiences and real estate purchase
motivations of various cohorts. These are classified as :

Young Renters -
Student Housing (Age: 18-25 years)
Micro-units / Professional Housing (Age : 25-35 years)
Upgraders -
Live-Work Homes (Age: 30-55 years)
Multigenerational Homes (Age: 35-55 years)
Downsizers: Senior Housing (Age: above 60 years)

Particulars Driving Factor Market Size Current Scenario Way Forward

Student Gross Enrolment 6% - 7% of the total Organised players Formal players will
Housing Ratio expected to migrants in these have catered to less try to compete by
reach 30% by 2020 cities come for than 5.0% of the improving amenities
higher education addressable market

Aging, inadequate High demand-supply

on-campus Southern cities : gap and higher
accommodation Latent demand of occupancy levels
2.2 Lakh units likely to attract
investments
Additional annual
requirement of
22,000 units in
Southern cities

Micro The median age of In Southern cities, Supply accounts for Policy intervention
Units Indian population 13.5% households 5%-10% of the likely to increase
would be 28 years (HH) have one or two addressable market institutional
by 2020. members investments in this
segment
Target segment
Young households 52,500 units would prefers rental model
value privacy and be the annual Developers
aspire to live in a addressable market evaluating rental
space with lesser size by 2022 Investor driven sales housing models will
maintenance increase supply

Emerging Residential Niche Products

Live-Work Flexibility of space Southern cities: 62% While these
Homes as extended living of the total products are
or office space households are emerging in other
under one roof nuclear families countries, in India, it
is yet to be These products are
addressed by third not likely to capture
party developers a large market
share; nonetheless
would be used as
Multi- Grandparents prefer Southern cities: 27% Product in a nascent unique selling
propositions in key
generational taking care of their of the total stage;developers
projects targeting
grandchildren and in households are joint are experimenting
Homes turn, making it easier families with this concept in upgraders
for the adults to take one or two projects
care of their aging
parents

Senior 60+ years population Southern cities: 3% 3,600 Senior living Future projects likely
Housing to reach 300 million of the total units launched since to focus on
by 2050 households have 2010 Mid-Income Group
solo or senior couple (MIG) segment
living alone
Increasing number Focuses only on
of nuclear families independent living Partnerships between
and improved life 12,400 units will be projects, targeting a health care providers
expectancy are the annual small segment of and national senior
driving the demand addressable seniors, who are able housing operators are
for senior housing market by 2022 to afford high-end going to encourage
products assisted living and
nursing care projects

Demographic conditions, increased developer interest, institutional investment and technological improvement will collectively
result in a sustained demand for these niche products over the next decade.

*Unless otherwise mentioned, Southern cities in the report refers to the cities of Bangalore, Chennai and Hyderabad
Emerging Residential Niche Products
TABLE OF
CONTENTS
05 Introduction

Young Renters
07
Student Housing

Young Renters
12
Micro Units

Upgraders
17
Live-Work Homes

Upgraders
18 Multigenerational
Homes

Downsizers
20
Senior Housing

25 Conclusion

Emerging Residential Niche Products

 05

INTRODUCTION
India’s property market is expected to grow at a compound rate of 14% between 2016 to 2020
and at 18% during the period 2020-20251. The Residential sector accounts for 80% of India’s real
estate market and the demand is driven by the following factors:

A India’s Demographic Dividend

India is now the largest contributor to the global demographic
64% Population in the

economically
transition. According to UNDP's World Population Prospects
2017, India is set to overtake China to become the world’s most
populous country in the next seven years. It is likely to be the
youngest country in the world with a median age of 28 years
active age group

and a dependency ratio of 0.4 by 2020. This shift in generations

presents both opportunities and challenges for the real estate
9.35% Population in

above 60 years
industry.

Median Age of Home Buyers in India age group

40 3 8 years
B Younger Home Buyers
Higher income, along with the easy availability of home
35 loans and the associated tax benefits, has brought down the
Median age

median age of home buyers in India to early 30s. Added to

this is the cultural mindset of the people who prefer home
ownership.
30 Migrant Population in Top Six Cities
28 years
20

17.5
25
2007 2010 2013 2016 2019 2022
15

12.5
Thousands#

C Urbanisation and Migration

10
Rural-urban migration is a significant contributor accounting for
7.5
22% of urban population growth.3 Better employment 43.5%
opportunities and education are the key reasons for urban 43.0%
5
migration.
2.5 53.2%

24.6% 25.4% 44.4%

Urban Average Household (HH) Size#
6 Bangalore Chennai Hyderabad Mumbai Pune NCR

5.3 Total Population Total in-migrants

5.1
D Reduction in Household (HH) size
Household Size

5
4.6
As per 2011 census, close to 56% of the urban households
in India have a median size less than 4.03. Also, a shift in the
4
cultural mindset and economic independence amongst the
younger generation has resulted in an increase in solo
households. By 2020, India will be home to around 17.4
3 million4 solo households.
1991 2001 2011

1. Morgan Stanley research report, 2017 3. Census of India, GOI

2. www.dnaindia.com 4. Euromonitor Report 2012
Emerging Residential Niche Products
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Real Estate Market Segmentation Based on Age Cohorts

India’s residential real estate segment is growing and developers are looking at ways to differentiate their products in a highly
competitive environment. Product differentiation based on generational age-cohort segmentation is looked at as an opportunity
as it has the potential to capture niche markets with specifically tailored products.

‘Generational Cohorts’ are defined as a group of people in the same age group with similar experiences. These experiences
define their values, beliefs and attitudes thereby shaping their consumption patterns and their housing needs.

This report looks at the niche residential products that are evolving in the residential market of Southern India as a result of these
age cohorts, their needs, preferences and purchase motivations. The niche products are:

Young Renters –
Student Housing (Age: 18-25 years)
Micro units (Professional Housing Age: 25-35 years)
Upgraders -
Live-work Homes (Age: 30-55 years)
Multigenerational Homes (Age: 35-55 years)
Downsizers: Senior Housing (Age: above 60 years)

100 + 0.00%

95 to 99 0.02%

90 to 94 0.09%

85 to 89 0.26% Downsizers:9.35%
80 to 84 Silent Generation 0.58%
Senior Housing
Age: above 60 years
75 to 79 1.03%

70 to 74 1.57%

65 to 69 2.41%

60 to 64 3.38%

55 to 59 4.11%
Upgraders:27.89%
50 to 54 4.83% Live-work Homes
Generation-X 5.53%
Age: 30-55 years
45 to 49
Multigenerational Homes
40 to 44 6.28%
Age: 35-60 years
35 to 39 7.14%

30 to 34 8.03% Young Renters:25.50%

Generation-Y Micro-units
25 to 29 8.55% Age: 25-35 years

20 to 24 8.93% Student Housing

Generation-Z Age: 18-25 years
15 to 19 9.29%

10 to 14 9.47%

5 to 9 9.36%

0 to 4 9.15%

Age-wise Indian Population Distribution in 20175

5. Population pyramid of the world

Emerging Residential Niche Products
 07

YOUNG
RENTERS
STUDENT
HOUSING
The concept of student housing has transformed itself from basic accommodation with shared
facilities to the one with lively, engaging, state-of-the-art facilities. Today, student housing mirrors
a diverse society and provides an environment to collaborate, experiment, make connections
and friends for life. Student housing facilities have diverse unit types to cater to one’s privacy
needs combined with innovative and flexible common spaces.

18-25 years
Age of the cohort

10% Of the total

population in this cohort

35.7 million
India:
6
Students enrolled during 2016-2017

Higher Education
25.2% 7
Current Gross
Enrolment Ratio ( GER)

Target GER for 2020

30% 6

GENERATION - Z
Technoholics, social,internet dependent,
entrepreneurial, career multitaskers

6. Ministry of Human Resource Development, Government of India

7. All India Survey on Higher Education (AISHE 2017-2018)
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Traditionally, accommodation for migrant students in colleges and universities were provided on campus, very often with minimal
facilities. With increasing enrolment of both domestic and international students across most Indian Tier I and II cities, colleges
and universities have not been able to keep pace with the provision of student housing. Accommodation within the campus often
falls short of requirement. Students are forced to opt for housing in the unorganised sector.
Currently available options are:
Paying guests rooms only for students
Residential paying guests
Renting an apartment
These options are generally expensive and lack the desired layout for the students. There is a need to cater exclusively to the
students' requirements by providing them with comfort and security within a rental accommodation.

Organised Operating Models

Traditional Management PPP (BOOT) Integrated

Model Model Model Model

Higher Education Education Institutions Student Housing

OWNERSHIP HEI
Institutions (HEI) or Government Service Provider (SHSP)

DEVELOPMENT HEI HEI SHSP SHSP

OPERATIONS &
HEI SHSP SHSP SHSP
MAINTENANCE

LOCATION On Campus On Campus On or Off Campus Off Campus

Market Size of Student Housing in Southern cities

8.1 million 0.22 million

beds beds
Latent Demand Latent Demand across
across India Bangalore, Chennai &
Hyderabad

2.31 million 0.1 million

beds beds
Additional Demand Additional Demand
across India in next 5 across Bangalore, Chennai,
years Hyderabad in next 5 years

Emerging Residential Niche Products

 09

2,049
7
An aging, inadequate stock of on-campus hostel beds has
created a huge market for privately developed student About
housing in Tier I and II cities in India Colleges in Bangalore, Chennai and Hyderabad

On campus hostels have an average occupancy rate of

60% due to minimal amenities and poor maintenance.
450-500 beds
Typical size of the development
This is one of the key factors driving strong latent demand
Average super built-up area
The developers are mainly focusing on Bangalore, Pune,
Hyderabad, Delhi, Chennai, Mumbai, Indore and Kota,
since these cities have higher concentration of students
100-160 sqft per bed

Most preferred location for student housing projects are

within 2 km around colleges and universities
Key Players
Campus Student Communities, CoHo,
Bright Youth Student Housing, Good Host Spaces,
Organised players have so far captured less than 5% of YoHo, Your Space and MSR Ventures.
the student housing market

7-10 Lakhs Average investment

per room excluding the land cost

14%-17%
Yield Rate
8

90%-93%
Occupancy rate of privately developed student housing

Land area 1.0-1.5 acres

(for 500-1,000 beds with a built up area of 145
*

sqft/bed and 1.75-2.25 FSI)

Target Land Value

500-750/sqft (FSI Cost)

Revenue per bed

9,000-11,000/bed *

(net revenue after deducting operating costs)

8. Assuming 40% of fees as operational expenses per student and the land is on long term lease with low rentals
Emerging Residential Niche Products
 10

Student Housing Facilities

Basic Medium# Premium##

Food Air Intercom

facility condition facility

Interactive Laundry Guarded

spaces services swimming pool

Medical House Personal

facility keeping mentoring

24 hours Transportation
security facilities

Wi Fi
connection

# In addition to basic ## In addition to basic & medium

Regulations Investments in Student Housing

Permissible Zones Student Housing Funding9 Investor

Residential Land Use, Public & Semi Operator
Public Land Use Category
Your Space 3.3 Crores HNIs

YoHo 350 Crores Goldman Sachs

Parking
Requirement for Hostels Matrix Partners
1 Car Park for every 10 rooms* Stanza Living 13 Crores and Accel Partners

Way Forward
Government of India has set a target to increase the Gross Enrolment Ratio in higher education to 30% by 2020. To achieve
this, an additional capacity has to be created for 2.31 million students

Other than Tier I and II cities, Tier III cities like Jaipur, Kota, Indore, Nagpur, Bhopal and Coimbatore are also potential
markets for student housing

The next few years are likely to witness an increase in the market share of formal players. They will compete by providing
improved amenities

The initial projects are likely to target the private higher education institutions where paying capacity is higher. Several formal
players are likely to enter into partnerships with private educational institutions to set up student housing

Key players such as Your Space and Campusville, who have raised funds recently are expected to add another 50,000 new
rooms over the next 5 years

For investors, high demand supply gap and high occupancy levels make this a very attractive investment opportunity

9. Venture Intelligence
Emerging Residential Niche Products
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Case study: Campusville Lalbagh Boys Hostel (LBH) Developed and Managed by

Campusville hostel is an independent building on 0.5 acres of land on Campus Student

Communities
Lalbagh Main Road, Bangalore

This location has a number of colleges in the vicinity such as Sri Bhagawan Providing high-end student living facility
Mahaveer Jain College, BMS Group of Institutions, National College and
Bangalore Institute of Technology

Total number of rooms: 54; rented either as twin sharing or triple sharing
Operating Model
Annual Lease

Carpet area: 180sqft – 250sqft

₹ 15,500
Rental price per month
#

Services Provided: food, house keeping, 24x7 security, centralized air

Including food and all amenities
conditioning, Wi-Fi and IVRS, power back up, shuttle bus services and a

Criteria
maintenance app to address grievances

Student must have a valid ID card

Note : Image Retrieved from - https://campusville.in/lbh

# Price is as of October,2017 as collected through Primary survey
Emerging Residential Niche Products
 12

YOUNG
RENTERS
MICRO-UNITS
India is home to the largest population in the Generation Y cohort (25-34 years old). Also known
as the 'millennials', this cohort refers to culturally diverse, tech savvy and economically
independent urban dwellers. Their functional approach, need for flexibility and their desire for
more time and freedom define their housing needs – the compact yet functional micro-units.

Micro-units are an established phenomenon in cities like New York, Singapore and Tokyo where
land is in short supply and the cost of housing is extremely high. In India, this concept is slowly
catching up to accommodate these younger households that value privacy, aspire to live in a
space with lesser maintenance and seek homes closer to their work places and amenities
without over-burdening their finances.

28 years
Median age of Indians by 2020 making it
the youngest nation in the world

232 million 10

Estimated population in India

would be between 25-34 years by 2022

13.5%
One or two member HHs in South India

16.5%
Of total population in this cohort

GENERATION - Y
Culturally diverse, technology savvy,
social , comfortable with change, prefer
disposable jobs for better perks

10. Population pyramid of the world,2022

Emerging Residential Niche Products
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Micro-units are defined as units with a floor area smaller than the market average sizes without compromising on the quality,
finishes and comforts of a regular apartment11. The size of a micro-unit depends on the market in which it is located. In India, the
minimum size of a dwelling unit is 30 sqm12, usually in the studio, 1 BHK and 1.5 BHK sizes.

Characteristics

Housing layout Design need Furniture

Defined kitchen and toilet Built-in storages required Flexible in nature like
compact layouts for easy for optimum space hideaway kitchen modules,
maintenance utilization convertible tables, murphy
bed etc
Construction cost Parking
Higher compared to Higher due to high vehicle
standard apartments due to ownership of the cohort
higher density of kitchen
and toilets

Grocery Equipped Restaurants Laundry Café Professional Outdoor

stores gym & Bars room service maintenance sports

Market Size for Micro Units in Three Southern Cities

20 average annual office space

million absorption across Bangalore,
sqft Chennai and Hyderabad

0.2 jobs created annually in the services

sector across the 3 Southern cities
million

of the jobs in Bangalore, Chennai and

38% Hyderabad are taken by highly
educated migrant professionals

of the educated workforce are in

70% junior and entry level and require
suitable accommodation

11. Urban Land Institute, “The Macro View on Micro-units”, 2013

12. National Building Code of India, 2016
Emerging Residential Niche Products
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Micro-units account for 5%-10% of the addressable market in the

three Southern cities ₹ 9,000-₹ 15,000
Monthly rental for single tenant
The target segment prefers to rent these units, as they are not yet
ready to make large financial commitments. The micro units are
Key Configurations
11,400

almost entirely owned by investors

14,500

Studio (380 sqft)

This demand supply mismatch also opens up a sizeable market 1BHK (400 - 450 sqft)
for rental units in this segment which is almost entirely being 1.5 BHK (500 - 600 sqft)
serviced by sharing larger apartments
Annual Rental Yield
Micro-units are located close to major economic hubs, especially
technology related jobs 14%-17%
(without land cost)
Central Business District is also a preferred location, however,
due to high land values micro units are modified as hotel branded
serviced apartments
Suitable Locations
BANGALORE: Bangalore North,
Currently there are no dedicated micro unit projects as in the other Sarjapur Road, Whitefield, Electronic City
developed countries, however, these units are provided as a part CHENNAI: OMR, GST Road
of larger developments HYDERABAD: Gachhibowli, HITEC City
The cost of construction for projects with entire inventory in Typical room size
micro-unit configurations is higher due to higher density of kitchen
and toilets 150-200 sqft/ bed
Achievable rent per sqft is higher compared to larger unit sizes Land Area

1.25-2.5 acres
Typical size of development

500-1,000 beds

Operating Models

Outright Sale Rental Housing

Currently all the compact products 95% of young renter prefer this model. Proximity to work place is the
available in the market are working key deciding factor.
on outright sales model.
Management Model Integrated Model
However only 5% of the end users Construction and development done Rental management company
prefer to buy. Majority of these units by owner/developer on their own land constructs leases and
are bought by investors. or joint development and leasing and manages the facility.
maintenance taken care by
management company.

Way Forward
Micro-units are in a nascent stage but have the potential to capture at least 25% of the addressable market over the next 5
years. The demand for micro-units is expected to remain strong in the next decade due to the demographic shift and
rising property prices
Annual rental yield is in the range of 14% -17% ( without considering land cost)

Micro-units are also eligible for the income tax benefits (100% deduction of profits) subject to the condition that at least 35%
of the inventory falls under 60 sqm13 carpet area

13. Minimum unit size is 30 sqm for Chennai , as it is metro city.

Emerging Residential Niche Products
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Developers are likely to explore rental housing model in this segment over the next 1-3 years in anticipation of the National
Urban Rental Housing Policy (NURHP, 2015) which is currently awaiting cabinet clearance. This will also increase
institutional investments in this segment, there by increasing the supply
Locations in close proximity to metro stations and well connected to economic hubs and amenities would be preferred for
expansion. This product can be integrated with student housing in key micro-markets.

Case study: Uniworld, Bangalore Developed and Maintained by

Located in Electronic City in close proximity to Wipro and Infosys Uniworld with
Total number of units: 785 Private Investors
It consists of double sharing units
Special top up cards provided to make it cash free campus
Room Rental*
INR 8,000-10,500 (non AC)
The tariff includes taxes, buffet breakfast, daily housekeeping, bedsheet, INR 22,500-30,000 (AC rooms)

Room Sizes
pillows and blanket
Services Provided: Wi-Fi, gym, laundry, veg/non-veg buffet dinner, games, 294 sqft to 615 sqft
lounge, movie theatre, shuttle bus service. Parking and locker facilities are
provided on extra charges every month. Development Model

Rental Housing

Note : Image Retrieved from - https://www.justdial.com/Bangalore/Uniworld-Service-Apartment-ajmire-infinity-Electronic-City/080PXX80-XX80-130626175446-I7M8_BZDET/photos

* Depending on single or double occupancy
# Price is as of January,2018 as collected through Primary survey
Emerging Residential Niche Products
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Case study: Assetz Here and Now

Located in Ranchenahalli in close proximity to Manyata Embassy Business
Park, one of the major economic hubs in Bangalore North employing nearly
130,000 people Assetz
Developed by

Total number of units: 384 units spread across 3 acres of land Property Group
It consists of compact studios, 1 BHK and 2 BHK apartments with size
specifications of 440 sqft, 690 sqft and 990 sqft respectively ₹ 4,899 #

Base price per sqft

Flexible design where two units can be combined to form a larger unit when
family size increases
Monthly
Compact design with an average efficiency of 75.7% with AV Intercom for
every unit
Maintenance
₹5.0 per sqft for common
area maintenance charges
Optimally planned to suit immediate life requirements with tucked in
wardrobes Development Model

Available amenities: Club house, swimming pool, indoor games, multi Outright Sale
purpose hall, gym, Wi-Fi zones, outdoor games, kids play area, jogging track,
lounging lawn

High speed internet access is provided at the common area and the club
house

Note : Image retrieved from - http://www.assetzhereandnowBengaluru.in/gallery.html

# Price is as of January,2018 as collected through primary survey
Emerging Residential Niche Products
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UPGRADERS
LIVE–WORK
HOMES
As the family size increases, home buyers tend to upgrade to larger units. A small segment of
nuclear families may opt for live-work homes where one of the parents chooses to stay at home
to take care of their kids and work from home without compromising on the professional career.

Age of the cohort

30-55 years
62% Households 14

In southern cities in 2017

Need for Conducive

Zoning Regulations

Flexibility of space as extended living or office space under one roof is

re-emerging. In the start up era, young entrepreneurs can use the extension of the
home to start their businesses, while experienced professionals like doctors,
lawyers, architects, artists and chartered accountants can continue their practice,
utilising the area that is easily accessible to the public while actually being an
extension of the home. Due to higher footfall of visitors/ non residents in
Live-Work Homes, it is mostly discouraged in Apartment typology. But developers
can adapt this concept for villa or row house projects as Unique Selling Point.
GENERATION - X
Personal life priority, work life balance,
independent , confident, stable and
loyal, entrepreneurial spirit,
dedicated to progress Possible Designs*

Live - Within Type Live - Above Type Live - Behind Type Live – in- Front Type
Workplace and living Workplace below the Workplace in front of Workplace behind the
area completely overlap residential quarters residential quarters & living quarters, along a
rear part for a house rear alley
Demarcation line can be Complete demarcation
adjusted daily between the two Demarcation between Fully compatible
functions both uses is complete conventional house &
Perfect for business freestanding work
incubator Allows independent Possibility of leasing of quarters suitable for
leasing of commercial workspace to separate restricted uses
Double functioning section for limited use entity
spaces built cost Demarcation adjustable
effectively to changes in family life

14. The Marketing White book 2014-2015

* Lean Urbanism Brief - Leaning Toward Live -Work Units
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UPGRADERS
MULTI
GENERATIONAL
HOMES
Families are emotionally bonded across the generations. In India, it is the common norm for both
single and married adults to live with their parents. Grandparents and grandchildren are mutually
benefitted by taking care of each other. People prefer to live close to their extended family, yet
maintain their privacy and independence.

Age of the cohort

35-55 years
27%
15
of total
Households in Southern cities

A multigenerational home is a residence where two or more set of adults have

dedicated set of rooms under the same roof. These units feature homes within a
home that offers private spaces as well as shared common space for all
generations.

Retired Parents Your Retirement

You live in the larger house You eventually move to the
and smaller house is smaller unit and married
for parents, in-laws youngsters and grand children
or unmarried child live in the larger house

GENERATION - X
Adaptable, creative, priority to
personal life activities, sense of
ownership, affinity towards
Present day After 15 years After 30 years
technology, work life balance,
independent and self sufficient
Beginning of the new cycle

Villas and Apartments with Flexi Options - How It Works

Two or more generations can live together in same house without compromising on their individual lifestyles
With Generation Y expecting more privacy at home, the smaller unit can be transformed into a bachelor pad
The linked smaller apartment can also be used for frequent guests and various vocations
Multigenerational homes can also be converted to a single household if required in the future. For example,
multigenerational house with 3BHK + 1BHK can be converted to a 4BHK with servant quarters
Though apartments and doublement villas are present typologies experimented by the developers in India, but there are
other types of multigenerational housing as well like -2- in -1 semi detached house, farmhouse, row house and town house

15. The Marketing White book 2014-2015

Emerging Residential Niche Products
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Characteristics

The preferred units sizes range from 1,800–3,000

sqft
Amenities needs to be provided considering
various generations
Housing layout
Open plan - flexible and adaptable to
changing needs and occupancies

Senior citizen Banquet 24 hours Swimming

lounge halls security pool

Design need Separate entrances

Large living rooms, dining Main-floor bedroom suites,
room and kitchen kitchenettes and living Kids
consideration spaces Play area Pet park Prayer place

Way Forward
While multigenerational and live-work homes have always been a part of the Indian single-family landscape, developers have
started adopting this concept even in multi-family projects today. This trend is also catching up the world over post the financial
crisis

Although these products will only capture a tiny market share, but they can definitely be used as unique
selling propositions in projects where the target segment is upgraders

Emerging Residential Niche Products

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DOWNSIZERS
SENIOR
HOUSING
In the Indian context, seniors are looked after by their next generation. With younger generations
settling abroad, a significant section of senior citizens are staying alone today. With aging, it
becomes difficult for them to maintain the property that they are living in. An increasing sense of
insecurity, lack of companionship and age-related health problems in elderly citizens demand for
a sensitive approach towards housing this cohort.

India

148 million
16

Estimated population above 60+ years by 2022

In Southern cities 3%
households17

9.35% of total
population in this cohort

Cohort growing at CAGR of

3.75%

SILENT GENERATION
Loyal, self-sacrificing, cautious,
conformist, conscientious,
optimists, rationalists, civic-minded

16. Population pyramid of the world,2022

17. The Marketing White book 2014-2015
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Senior living communities provide housing suitable for an aging population where all the required facilities are present within the
same campus. The facilities range from independent living to nursing care facilities based on the level of care required. Safety,
accessibility and adaptability are the key design considerations.

Level of Care

DOWNSIZERS
60-70 years 70-80 years Above 80 years
Active individuals Active individuals with Need continuous
taking care of the need of assistance medical assistance
themselves with no for daily activities and care
severe ailments

Independent Living Assisted Living Nursing Care Living

Prefer 1BHK or 2BHK Prefer compact 1BHK or 2BHK Equipped for 24 hours nursing
independent villa or units with larger toilets and pantry facilities.
apartment. facilities for wheel chair access.

Maintenance, Security, Staff assistance for custodial care. Must have a hospital within the
Housekeeping are taken care of. campus or a tie-up with
Have a doctor facility or a small multispecialty hospitals in the
Might have a visiting doctor or a clinic near by. neighbourhood.
hospital in the vicinity.

Rise in nuclear families and improved life expectancy are the key demand drivers for Senior Housing. One senior in every 10,000
is engaged in some form of senior living in India as compared to 12 in every 100 in the USA and 4 in every 100 in Australia18.

Market Size of Senior Housing

Hyderabad has already

witnessed the launch of a
few Senior Housing
projects over the past five
6,000 years; however no new
5,400
launches recorded post
5,000 2013
4,200
Number of units

4,000
3,600 3,400
2,900
3,000
2,600

2,000 1,080
460 240 540 340
(20%)
(12%) (8%) (15%) (10%)
1,000

0
2017 2022 2017 2022 2017 2022
Bangalore Chennai Hyderabad

Market Share of Organised Players Addressable Market

Source: Meraqi Research

18. HUDCO – Shelter, April 2016 : Volume 17 No.1.

Emerging Residential Niche Products
 22

Apartment is the most prevalent product type in tier I

cities with 1BHK, 2BHK, 3BHK configurations (size 15%-18% yield rate
ranges from 650-1,500 sqft); whereas villa is the
preferred product type in tier II & III cities 3,600 Units
Senior living units launched in Southern cities since 2010
Sale price is typically 10%-12% more than normal
residential units because of the specialized design
requirements. Maintenance charge ranges from Rs.6-7/- Key Developers
per sqft per month, which is double the normal Mantri Developers, Ozone Group, Brigade Group, Tata
maintenance charges on account of additional services Housing, Paranjappe
provided.

Key projects launched in these segments include Tata Locations

Mostly 30-40 km away from the city centre, as part of
Riva, Brigade Park Side Retirement Homes, Serene
an integrated township
Pushkar, Anandam, Athasri Paranjape, Ashiana

Planned Projects
Shubham and Saket Pranaam

Apart from these southern cities, Mysore, Coimbatore, Covai Arete Chennai,
Pune, Kochi, Goa and Dehradun are the other preferred Covai Bengaluru Senior Living
locations

Key Operators
Covai Care, Age Ventures India, Athasri, Mantri Primus
Lifespace Pvt Ltd, Serene Senior Living, Vedanta Senior
Living, Ashiana Housing

Food Continuous Special 24 hours Social Audio Visual

services concierge medical security engagement library
facilities

24X7 Emergency Aesthetic

ambulance button environment

Operating Models

SOLD DEPOSIT RENT

Deposit Model /
Outright Sale pay back schemes Pure Rental Model

Freehold ownership No transfer of ownership No transfer of ownership

OWNERSHIP
of units by buyer

MODEL Purchase Long term lease Rental

DEVELOPMENT Developer Developer Developer/ Operator

OPERATIONS &
Operator Operator Operator
MANAGEMENT

High refundable deposit Minimal deposit +

INVESTMENT Capital investment Monthly rentals
with lock-in period of 9
years + Monthly rentals

Emerging Residential Niche Products

 23

Reverse Mortgage
Introduced in 2007, Reverse Mortgage enables a senior citizen to
receive a regular source of income from a bank or a financial
institution against the mortgage of his property
In India, property ownership is considered as an inheritable subset
Ownership
In Sale model, transferred to heir after the demise of the
ideally to be handed over to heirs. Emotional attachment to the senior owner resident, however the children can reside
property and lack of awareness has resulted in negligible people after they are 55 years. No age restriction for buyer
opting for reverse mortgage

Way Forward
55 years
Minimum Age of Residents
(Owner/Tenant)
The demand for senior housing is expected to increase multi-fold
over the next few decades – with the population aged above 60 Children and relatives can stay up to a
years growing to 300 million by 2050. Lack of public sector
solutions to address the housing needs of a growing senior limited period
population has presented the private sector with a huge (2-3 months) In a year
opportunity to develop innovative models in this segment

Currently, the senior housing is in a nascent stage and the products developed are focusing on a small segment of seniors
who are able to afford high end products. However, majority of the demand in India will be created by the middle income
segments and both developers and senior housing operators are now shifting their focus on making their products
and services more affordable
Over 90% of the operational and under construction projects are independent living projects. The share of assisted living and
nursing care projects are negligible. Recent partnerships between leading international healthcare provider/s and
national senior housing operators are likely to increase supply in the assisted living and nursing care segment over
the next 5 years
Government interventions to promote affordable housing solutions for seniors through innovative financial models such as
reverse mortgage, suitable zoning regulations promoting affordable housing, tax incentives and geriatric care will
benefit this sector

Emerging Residential Niche Products

 1
24

Case study: Mantri Primus Eden, Bangalore Developed by

Situated on Kanakapura Main Road, near Art of Living centre
Mantri Developers
Primus
Total number of units: 75 apartments on 4.5 acres
Managed by
10% of One Time Membership fees and refundable deposit to be paid
on booking and remaining 90% on agreement
Operating Model
Rent includes, housekeeping, primary medical care, concierge, events Long term lease

Age Criteria
and activities, meals and snacks, comprehensive maintenance and
repairs of both within home and common areas and unlimited usage of
all other amenities Resident must be minimum of 55 years

Amenities
Charges (in INR) Studio 1BHK On-campus full-time doctor, nurse and
physiotherapist, on-site ambulance, Cafeteria,
Single Occupancy a library managed by JustBooks, browsing
35,000 45,000 centre, indoor games room and an outdoor
(monthly rent)
games arena, meditation hall, a temple, gym,
concierge and multipurpose hall
Double Occupancy
50,000

Configurations
(monthly rent)

Refundable Deposit 1,750,000 2,450,000 Studio – 430 sqft

1BHK – 730 sqft
One time
membership fees 750,000 1,050,000

Note : Image Retrieved from - http://mantriprimus.in/

# Price is as of January,2018 as collected through site visit
Emerging Residential Niche Products
CONCLUSION
India’s demographic dividend is unique – with untapped potential for alternative asset classes targeting different
generations

Significant demand, lesser competition and resultant higher yield makes these products suitable for private developers, as
they look towards expanding their footprint beyond conventional real estate asset classes

However, addressing this vast demand supply mismatch requires a change in housing policy approaches which so far has
been promoting only the ownership models. While supply is expected to increase in the next three years on account of
benefits/subsidies available under the affordable housing policy (most of these niche products conform to the carpet area
requirements - below 30 sqm for metro  and 60 sqm in non-metro cities), a robust rental housing policy will help in
significantly increasing institutional investment in these rent yielding asset classes

Rental housing products like micro-units and student housing will capture a larger share of the addressable market in
comparison to upgrader products such as live-work or multi-generational homes. Upgrader units will compete with
conventional 2 and 3 BHK units which account for the bulk of the residential supply and therefore will witness limited
growth. The focus of senior housing products will now shift towards assisted living

While products like micro-units and multi-generational homes will expand in Tier I cities, student housing and senior
housing will see growth in Tier II and III locations as well, in case of tie-ups with universities and healthcare operators
respectively. However, the focus of institutional investors would be on Tier I cities or at entity level at least for the next 3-5
years

The expansion of these products have so far been comparatively slower due to the need for specialized operational
expertise. The start-up environment in India is expected to address this issue and will also increase the reach of these niche
products in terms of marketing and sales

Demographic conditions, increased developer interest, suitable policy changes, institutional investment and technological
improvement will collectively result in a sustained demand for these niche products over the next decade

Emerging Residential Niche Products

ABOUT US AUTHORS
MERAQI is a distinctive real estate investment management firm Shwetha Pai, MRICS
offering bespoke solutions to sophisticated investors. We are a select
team of real estate experts, inspired to make a difference in real estate Director
investment management. Our core offerings include Advisory Services,
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CORE TEAM
Gorakh Jhunjhunwala, MRICS Shwetha Pai, MRICS Gagandeep Chhabra

Managing Director Director Director

gorakh@meraqiadvisors.com shwetha@meraqiadvisors.com gagan@meraqiadvisors.com

Dhara Shah Supreet Chowdhary

Associate Director Investment Director,

dhara@meraqiadvisors.com supreet@meraqiadvisors.com

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Associate Director Senior Manager

sumathi@meraqiadvisors.com abilash@meraqiadvisors.com

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Emerging Residential Niche Products

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