Oyo Now Wants To Rent Houses, Too
After upending the budget hotel industry, India’s second-largest startup wants to shake things up in the housing rental segment.
Hospitality chain Oyo—which raised $1 billion from Japan’s SoftBank and other investors last month valuing it at $5 billion—said today it will offer fully managed shared residential spaces. The business will be called Oyo Living and will primarily target working professionals and students, it said in a statement today.
To be sure, the student housing alone has the potential to yield more than 12 percent returns and is expected to see a compounded annual growth rate of 38 percent to Rs 2,400 crore until 2020, as per a report by Federation of Indian Chamber of Commerce & Industry and JLL India, titled, 'Future of India Real Estate.
Oyo Living was conceptualised based on the feedback and demand from our customers and asset partners, Ritesh Agarwal, chief executive officer and founder of Oyo Hotels & Homes, was quoted as saying in the statement. “We decided to leverage our hospitality experience to offer a first of its kind end-to-end fully managed living experience.”
Starting at Rs 7,999, per bed per month, each accommodation will comprise essential amenities like Wi-Fi connectivity, television, regular housekeeping, power backup, CCTV surveillance and 24x7 maintenance.
Oyo has onboarded over 35 properties with 2,000 beds, across Noida, Bengaluru and Pune, and plans to scale it up to about 50,000 beds in the next one year across the top-10 metros.
The Gurugram-based startup said it’s working with independent owners and large builders to lease out properties for long-term housing. It will take complete control of the properties, which will be fully-managed and will also handle contracting and brokerage with guaranteed rental yields.
With this, Oyo will compete directly with Nestaway, which raised more than $100 million in external funding till date, and ziffyhomes, both of which follows the similar managed home rental model. Besides, it will also compete with other home rental platforms such as FastFox, Nobroker.com, to name a few.
Oyo has branched out into other types of lodging, including the Oyo townhouse, and verticals that include wedding planning. It’s now said to have about 213,000 hotel rooms across India, China, Malaysia, Nepal, U.K., U.A.E. and Indonesia.