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Housr checks into India's rapidly growing co living space targeting millennials

Housr checks into India's rapidly growing co-living space targeting millennials

Housr checks into India's rapidly growing co-living space targeting millennials
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By Manisha Natarajan  May 1, 2019 12:19:39 PM IST (Published)

Founded by two experienced real-estate hands, Deepak Anand and Kalpesh Mehta, Housr calls itself a super aggregator of properties and enters an already busy market with deep-pocketed players

Co-living, the latest buzzword in India’s real estate, has a new entrant Housr. Founded by two experienced real-estate hands, Deepak Anand and Kalpesh Mehta, Housr calls itself a super aggregator of properties and enters an already busy market with deep-pocketed players like Nestaway, Co-Ho, Stanza and Ola Living apart from multiple smaller startups, operating at a city level.

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Everyone seems to be betting on the big number of 440 million millennial Indians, the highest in the world, and a triple play of shared economy, technology and urban migration. India’s total housing rental market in 2018 was pegged at $22 billion or Rs. 1.6 lakh crore and, according to MagicBricks, there has been a surge in searches for co-living rentals on its site.
Manisha Natarajan caught up with Anand and Mehta to find out how they plan to reach their stated goal of becoming the largest players in India’s co-living space in the next 18 months.
You call yourself the super aggregator of properties. And the timing couldn’t have been more ripe, considering developers are finding it hard to sell inventory. Does your strategy involve buying out inventory/towers from developers or renting it out?
Deepak: Our model will benefit developers in more than one way. First, leasing the entire tower not only provides them yield on these properties but also fills up the property and makes them more lively. Second, we are also tying up with developers who will provide built to suit properties where we can offer upwards of 6 percent to 10 percent yield, which is unheard of in the residential space.
How much initial funding have you raised from your three key investors Abhishek Lodha, Pirojsha Godrej and Harsh Patodia? Is it enough for the cash burn you envisage over the next 18 months? Or would you be going for another fund raise?
Deepak:  Given that this is a private investor round, we are not disclosing investment numbers at this stage. However, our capital plan involves $50 million investment over the next 18 months which will require multiple additional funding rounds.
How do you propose to take on the young and nimble competitors like NestAway, CoHo, and even Oyo Living, who are funded by deep-pocketed investors like Softbank and Sequoia Capital?
Kalpesh: We have to be thankful to the existing current players as they have demonstrated that the demand for co-living is unlimited regardless of product quality. What we are offering is so fundamentally different from our competitors,  both in terms of product design and service offerings, that we are not very worried about competition.
Each of our properties will have between 500-2000 residents. This gives us unparalleled economies of scale, unparalleled services and experiences that no one else is able to offer. Our secret sauce lies in identifying and aggregating large properties which our business model of creating mega co-living communities demand.
Whether its open mics, cook-out sessions, karaoke nights, flea market, being able to do it with 500-1000 people at a location is a whole different ball game compared to doing it with 50 people, where we control the entire tower.
You say you’ve locked in 10,000 beds across Delhi NCR, Mumbai and Kota and planning to lock in 50,000 beds in the next 18 months. How deep is the co-living market beyond the top 4 cities? Kota is an interesting choice.
Deepak: The segment has one of the largest demand potential in the country, with market size of over 50 million plus millennials in the top ten cities in India. All the co-living players put together in India have less than 100,000 beds. The demand-supply gap is mind-boggling.
What is Housr’s value proposition? This market ranges from managed rentals to co-living and then the student housing space.  Are you targeting the entire value chain?
Kalpesh: The traditional rental system for renting homes is absolutely broken. Most properties are not available for rent to single millennials and the ones that are available provide low to no services and communities. Today’s millennials are demanding a better quality of life and better experiences and almost every other industry, whether it is food and beverage, entertainment, travel or fashion, is providing them with a high level of products and services except for the home rentals sector, that is the big gaping hole that we’re trying to fill.
We start with the basics: a beautifully furnished home, and then we add on services that take away the daily hassle of running that home such as daily housekeeping, laundry/ on-call resident facility management; curated meals, and we finish it with a cherry on top, which is providing a community of hundreds of like-minded people who help you be you.
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