Co-living Industry is growing at a substantial rate, driven by multiple tailwinds

• ‘Community Living’ or ‘Co-living’ is burgeoning sub-segment of the Residential Market Size

Rental Market, offering flexible community living to consumers at a premium US $20B
Residential Rental Market
• It can also be defined as ‘Bed & Breakfast 2.0’ – which combines private spaces
(bedrooms & bathrooms) with communal/shared areas like kitchen, living rooms,
dining area, game rooms, utility spaces or the gardens US $13.5B
Urban Market
• This combination of Safety, Privacy & Flexibility, attracts like-minded consumers by
providing a platter of services such as laundry, 24/7 backup, advanced security
systems, Wi-Fi, reading rooms, gyms and special events like poker nights
• Co-living is a nascent concept in India, with 20-30 start-ups setting up the playfield US $10B
in Metros & Tier I towns, led by likes of NestAway, Ziffyhomes, Zolo, etc. Co-living Market
• Multiple tailwinds – rapid urbanization, thrust on higher education, demand-
supply imbalance, higher yields, etc. – are driving substantial growth, with the
industry expected to grow at 35-40% CAGR in medium-long term (by 2020-22)
Growth Drivers
• While Working Professionals (away from Home) & Students are primary
customers, the concept is yet to catch-up with family setups
Thrust on Higher Rapid Urbanization
“Millennials want to live in flexible, hassle free and fully managed homes and as their population in Education Millennials
Tier 1 metros in India is growing, there is a huge gap in demand and supply”
- Nao Murakami, General Partner, Incubate Fund India (Aug 2017) Aspirations Investors Start-ups
“India has ~20 million students migrating internally in Metro & Tier I markets such as Bengaluru, High Occupancy
Delhi NCR, Mumbai, Pune & Hyderabad for higher education. Colleges are able to accommodate
Higher Yields
only a fraction of students, hence there is a huge opportunity… we have seen high interest with Demand-Supply Gap
listings growing at 50%...Metro markets like Delhi NCR, Bengaluru and Mumbai are fast-growing
markets catering to such needs” - Irwin Preet Singh Anand, COO, OLX India (Aug 2018)

Sources:
IMF, PWC, Forbes News, Business World, CoHo
Top cities account for majority share of the industry

Delhi-NCR Bangalore Pune

US $3.2B US $1.5B US $0.3B

US $10B
Co-living Market
Hyderabad Chennai Mumbai
US $0.7B US $0.6B US $2.9B

Union territories and more urbanized states

have a higher percentage of rental
housing…across size classes, small, medium
and large cities had 28%, 36% and 40% of
rental housing, resp. This pattern plays out
within cities too. In Bengaluru, 60% of
households rent – Mintline.com
Estimates basis migrant base, shared accommodation requirements & average rentals

Sources:
Census, World Population, TOI, Indian express, ET
Tailwinds & Headwinds

Tailwinds
Headwinds

• Rapid Urbanization & rising need for affordable

housing
• Thrust on higher Education • Rising Real Estate costs
• Demand-Supply gap • Finding right property at the right location
• Increasing aspiration of the youth • Trust deficit of landlords
• Rising Startup activity & Traction among • Weak regulatory environment – forced control
investors or rental default
• High flexibility – time, assets, etc. • Limited budgets of students & blue collored
professionals
• Asset light Model focused on leasing
• Higher yield as compared to commercial
leasing “While studying the market, I was surprised by the tailwinds the business
• High Occupancy Rates has going for it. The occupancy rate through the year is a high 95 percent.
And even though there are two months of vacation a year for students,
• Lack of focus of educational institutes on the fee for the entire year is mostly charged upfront” Ashish Joshi, MD &
student accomodations CEO, Landmark Capital Advisors

StayAbode helps increase rental yields from the
current 3-4% to 10-11% for property owners –
Business World
Sources:
Census, World Population, TOI, Indian express, ET
“This generation has an appetite for experiential living. Their focus
is less on accumulating fixed assets and more on a holistic living
experience, where resources are shared, connections are made and
ideas flourish”– Sanjay Shenoy, MD, Legacy Global Projects
“A stable co-living facility generates net yield of approximately 12%, while
rental yields from a traditional 1BHK remain at 1.5 – 3%. Co-living further
enhances revenue potential as cost of shared spaces such as kitchen and
living rooms is amortised over a greater number of bedrooms than in a
traditional residential development” – Shishir Baijal, Chairman and
Managing Director, Knight Frank India
Trends (1/2)

Urban Population (million)

Rapid Urbanization
• A larger number of people are moving to metros & bigger cities for jobs
and economic prosperity
• No. of Indians living in urban areas will reach 590 million by 2030
• By 2020, urban areas will account for more than 70% of India’s GDP 590
377 406 429
• Migration has almost doubled, to an annual flow of 9mn for 2011-16, from 217 286
5.5-6mn a year between 2001-11
1991 2001 2011 2014E 2015E 2030F

Student Housing emerging
• Increasing focus on higher education is driving this sub segment
• There are ~34 million students in higher education institutions & unmet
demand for student housing is as high as 30-60% across top states
• Knight Frank estimates current student housing demand to be ~6 million
beds in India & is concentrated in a few major education hubs
In India, the market for student accommodation is still at its nascent
stage. However, the rapid growth in its demand as a result of the
exponential rise in enrolments for higher education globally coupled with
the stable returns provided by this asset class is persuading investors to
take note of the potential this sector holds - Saurabh Mehrotra, National
Director, Advisory, Knight Frank (India) Pvt Ltd

"The rental market offers decent space for a

disruptive idea like co-living"
Increasing Investments - Anil Joshi, managing partner of Unicorn
India Ventures
• Multiple growth drivers & increasing consumer acceptance of this idea
fulfilling a need gap is attracting multiple investors to this space “Student housing is an established asset
• Most of the startups in this space are getting funded class in the west and we believe it can
• Co-living and student housing startups have been attracting investors since create a strong asset class in India” –
its inception Ashish Agrawal, principal, Sequoia Capital
India Advisors

Sources:
IBEF, Mintlive.com, Knight Frank, ET Now
Trends (2/2)

Entry of International Players
• US based rental and sharing house startup Roomi launched operations in
India in Oct 2016
• In July 2018, OxfordCaps, a leading Singapore-based student housing firm,
announced its foray into the Indian market, with premium student
residences in Delhi-NCR
“The market is extremely ripe because of the huge demand for such
accommodation; and given the slowdown in real estate market, investors,
particularly HNIs look to invest in such asset class and the return on
investment is assured. Foreign players are also attracted” - Suresh
Rangarajan K, founder and Chief Executive of CoLive

Property owners are getting interested

• Owners of existing guest houses, hotels, beauty salons, tuition centres,
etc. are converting their properties into co-living spaces for better space
utilisation and higher income
• Embassy Buildcon has partnered with WeWork, to establish a co-working
franchise model & launch WeLive its co-living venture
• OYO has launched ‘OYO Living’ with plans to enter Bengaluru, NCR, Pune
with more than 35 properties and 2,000 beds
• NestAway has entered into a JV of a noted industrialist to diversify into
creating co-living spaces
• In Bengaluru, parts of the erstwhile Safina Hotel has been converted into a
co-living facility called ‘The Hub’

Sources:
Business Standard, Business Line, Knight Frank, EY
Competitive Landscape – Luring potential is driving host of start-ups to organize this unorganized rental market
Multiple startups are present in accommodation aggregator space including Bengaluru-based home
rental platform Nestaway, Homigo, CoHo, Gurugram-based Fella Homes and NoBroker, etc. There are
also indirect players in the space offering rental as one of their verticals including Quikr, 99acres,
Magicbricks, etc. – News Portal

Professionals + Presence in
Students Delhi NCR

Industry comprises of players catering to Core competition - players catering to

• Professional & Students both Professionals & Students and having
• Students only presence in Delhi-NCR

Sources:
Your Story, Mintlive.com, Knight Frank, ET Now
Competitive Benchmarking (1/2)

Name NxTDEN Nestaway Ziffy Homes Zolostays CoHo CoLive

Origin Place Gurugram Bengaluru Gurugram Bengaluru Gurugram Bengaluru
Starting Year Apr 2018 Jan 2015 May 2015 July 2015 Aug 2015 Mar 2016
Total Funding Bootstrapped $94 million Undisclosed Undisclosed Undisclosed >$1 million
Investors N/A Tiger Global, DS Group (DSCP) Nexus Venture Undisclosed Undisclosed
IDG Ventures, Partners
Goldman Sachs,
etc.
Min. Stay Duration 10 months 48 months 43 months 41 months 40 months 34 months
# Footprint Cities 1 12 3 6 3 4
Rental Range (/bed) 7k – 9k 3.5k-27.5k 8k-20k 6k-8k 8k-25k 3.5k onwards
No. Beds 600 + 55000+ 5000+ 10000+ 2500+ 8000+

Aggregation model - Apartments & villas on

Apartments & villas Take entire buildings Apartments & villas
* 1 USD = 71.36 INR owners list homes & long-term lease & then
taken on long-term or blocks of buildings taken on long-term
decide what rent & converted. Furnishings,
lease & then on rent to amortise lease & then
what type of tenants white goods &
converted costs converted
they want appliances also rented

Sources:
Your Story, Mintlive.com, Knight Frank, ET Now, Company Website
Competitive Benchmarking (2/2)
Plans to venture into Hyderabad &
Plans to expand to top 8 cities of
continue expansion in Bengaluru. Manage
India over next 12–18 months and to
50,000 beds or 10 mn sqft. by end of FY20
have 10,000 beds by the end of 2019
• Bengaluru • Chennai
• Gurugram • Coimbatore • Vellore
• Delhi
• Noida
O
Bubble Size: No. of Beds
c
c
u
p
a Plans to expand into newer segments like
n community living, managing homes of
NRIs and even student accommodation
c
y
• Delhi • Bengaluru
• Gurugram • Hyderabad
• Noida • Pune
• Gr. Noida • Mumbai
Plans to expand its portfolio both # Cities • Ghaziabad • Navi Mum.
organic & in-organic / M&A way • Faridabad • Thane

Plans to expand to around 50,000

• Gurugram beds by end of 2019 and venture
• Noida into Mumbai and Hyderabad
• Ghaziabad • Gurugram • Bengaluru
• Chennai • Hyderabad
• Kota • Pune

Sources:
Your Story, Mintlive.com, Knight Frank, ET Now
Industry – Value Chain Analysis (1/2)

1. Lease & Operation 2. Ownership & Management

• Most prevalent model
• Co-living companies lease
properties on long term
basis (3-7 yrs)
• These properties are then
redesigned & sub-leased to
renters
• These companies have on-
site staff, like wardens,
housekeepers and security
guards for house keeping &
management of the property
• Revenue generated from
tenants is shared with
property owners on either
fixed rental income or
revenue sharing basis
• Owners receive annual
increment of about 7-10%
• The property owner convert,
reposition & manage their
existing properties as co-
living spaces
• These properties are rented
to guests
• No third-party operators are
involved for operations
• Owners of existing guest
houses, hotels, beauty
salons, tuition centres, etc.
are usually adopting this
model

Sources:
Knight Frank, Businessinsider.in, ET Now
Industry – Value Chain Analysis – Porter’s Framework (2/2)

Competitive Rivalry
Bargaining Power of Buyers
• A big play-field & high demand
leading to low competition • Consumers have fixed budgets, especially students
• Currently competition is that account for a large chuck of the base
concentrated in specific • However, the benefits of Convenience-Community-
markets / cities Collaboration command a premium (players operating
Threat of New Entrants in similar rent range)

• Low entry barriers are allowing host of startups to

enter the play-field backed by investors Bargaining Power of Suppliers
• International players also making their mark
• Managing & scaling operations • Security / trust issues & lack of confidence on
profitably is a challenge startups make property owners wary
Threat of Substitutes • Right location at right price is a challenge
• However, the lure of assured higher rentals &
• Property owners (especially mix land use operators) property maintenance is high
gearing up to enter the market
• However, illegal properties of security concerns of
owners is an obstacle
Med
Bargaining Power of Buyers
High
Bargaining Power of Suppliers
Low
Competitive Rivalry
High
Threat of New Entrants
Med
Threat of Substitutes
Nxtden is a property management company, which
manages the property on behalf of owner and provide
accommodation to working bachelor(s).

It is based in Gurugram, Delhi NCR and is India's first

"technology driven home rental marketplace". They are
a discovery platform who offer ready to move-in
individual rooms to tenants for long stays without any
maintenance charge, convenience of online rent
payment and freedom to move across our homes.

They connect owners to verified tenants making

accommodation easier for tenants and accommodation
providers.
Management Team

AJAY SHARMA
• MBA graduate with 12 years of experience in
rental market, having in-depth knowledge of
service industry
PANKAJ ARORA
• 5+ years of experience in architecture, design,
and development of scalable applications with
Bachelor’s Degree in Computer Science
Engineering

KUMAR ABHINAV
• MBA graduate with 9 years of experience in sales
and marketing, in service industry, worked with
top property portals
Rakesh Kumar
A Chartered Accountant with over 14 years of diverse
experience in Project Finance, Fund Raising, Investor
Relations, Corporate Finance

Sources: Provided by the Management

Products & Services
Stylish and smart décor,
electronic security, luxury
linen, AC accommodation,
Lease & Operation high end kitchen
Business Model utensils(microwave, water
Luxury purifier)
• NxtDEN leases properties on
long term basis (3-7 yrs) Living
• These properties are then
redesigned & sub-leased to
renters for long stays,
without brokerage
• The company deploys on-
site staff, like wardens,
housekeepers and security
Superior
guards for house keeping &
management of the property
Living
• Revenue generated from
tenants is shared with
property owners on either Manual security, AC
fixed rental income or accommodation, kitchen
revenue sharing basis utensils
• Owners receive annual
increment of about 7-10%
Economy
Living Manual security, budget
linen, non-AC
accommodation, no
kitchen utensils

Sources:
Company Website
Capital Requirements

Technology Platform

Bed Acquisition

Minimum Guarantee

Sales & Marketing Expenses

Operational Expenses

Sources:
Company Information