Apart from a co-living property, the investor is also planning a commercial property on the plot, said sources.
Brookfield is expected to pay some upfront money and the remaining will be on a revenue-sharing basis with MIAL, sources added.
“It is a new area for Brookfield, which it feels has a lot of business potential in the country. It could also develop similar co-living properties under the same brand in other cities also,” said sources, adding that it is also in talks with other developers to buy or lease land parcels.
Brookfield declined to comment while a mail sent to MIAL did not elicit any response.
Brookfield owns over 25 million sq ft of commercial property in Mumbai and other cities. It also bought Hotel Leela’s assets last year for Rs 3,950 crore.
Though Brookfield has bought assets of Unitech Corporate Parks in the National Capital Region and Kolkata as well as the commercial portfolio of the Hiranandani family in Powai area of Mumbai, among others, it has done mostly credit deals in residential areas so far.
It has plans to invest $1 billion in residential real estate through debt deals. A number of real estate companies
are getting into this segment.
Recently, Bengaluru-based Embassy announced it will invest Rs 2,000 crore to set up co-living spaces under the ‘Olive’ brand across top six cities. It plans to launch two centres each in Bengaluru and Chennai this year with 2,500 beds.
Bengaluru-based Puravankara has identified Goregaon in Mumbai as its foray point into the co-living space which would be about 350,000 square feet.
While Lodha Developers managing director Abhishek Lodha and Godrej Properties executive chairman Pirojsha Godrej invested in co-living start-up Housr last year, Bengaluru-based start-up Colive raised $9.2 million from real estate company Salarpuria Sattva.
According to a Cushman & Wakefield report, this segment is likely to more than double in market size from $6.6 billion in 2019 to $14 billion in 2025.
What is driving companies
to this segment is the fact that co-living offers a higher rental yield of as much as 8-11 per cent. This is compared to the current average yield of 1-3 per cent in residential properties.
Interestingly, co-living start-ups such as Oyo Life, The Hello World by Nestaway, Zolo and Guesture are actively pursuing opportunities in this segment.