In an exclusive interview, Rohit Kapoor, CEO, New Real Estate Businesses, OYO LIFE, talks about the co-living and student housing segments in India and shares his business outlook.
OYO LIFE, the housing rental solutions from OYO, has completed its one year of operations recently. Currently, it is present in 9 cities in India, including Delhi, Noida, Gurugram, Pune and Mumbai, and plans to expand to other cities as well in the coming years. In an exclusive interview with Sanjeev Sinha, Rohit Kapoor, CEO, New Real Estate Businesses, OYO LIFE, talks about the co-living and the student housing segments in India and shares his business outlook. Excerpts:
What drew you towards the co-living segment? Has the concept changed the house rental market in India for good?
OYO LIFE was conceptualized based on the feedback and demand from our valued customers and building owners for solving the pain-points associated with rentals, including high deposits, lock-in periods, non-transparent payments and lack of amenities. With its launch in October 2018, OYO LIFE embarked on a journey towards solving for these gaps and becoming India’s biggest provider of long-term rental housing, consolidating our position as a category innovator and leader in the co-living space.
India is a $50-bn housing market which includes 15 million migrant students and 40 million migrant professionals. There is an untapped demand of 60 million beds currently and this creates a huge opportunity for companies and start-ups operating in the space.
Today, professionals and students alike are looking for a place to stay which is not only closer to their offices and academic institutions, but also offers a bunch of amenities at affordable rates. By bringing such groups of millennials and professionals together for a hassle-free, rich rental experience, we are altering the long-term rental paradigm.
Today’s youth expect more than just the four walls of a room. People desire a higher quality of hospitality with amenities and comfort that let them get more out of life, to do what they are passionate about without having to stress over everyday home maintenance issues. They want a hassle-free experience, where nobody is asking them questions about gender, age, caste, marital status, etc. So, co-living works very well for a young workforce and students. It gives them the freedom and space they need and also eliminates the hassles of dealing with brokers, brokerage, lock-in periods, houses with little or no amenities, maintenance charges, housekeeping services, and security deposits, which can be a costly affair. We focus more on connection and circular lifestyles rather than just sharing the cost of living.
What is fuelling the growth of the student housing space in India?
India’s population is dominated by youth. As per India’s Census 2011, youth (15-24 years) in India constitutes one-fifth (19.1%) of its total population. Millions of students in the 18-24 age group are migrating from India’s smaller towns to metros to access quality higher education. The supply of hostels and on-campus accommodation is far short of the actual demand.
For us, student housing is a key use case under the larger rental housing segment umbrella which we are focused on in India. With massive demand and rising disposable incomes, there is ample scope for student housing to take off in a big way in the years to come. We are seeing an influx of foreign investors and multiple startups across the country catering to this space.
According to a report by the Student Accommodation Provider Association of India (SAPFI) and CBRE, the student housing sector will attract as much as $700 million investment and add 600,000 beds by 2023.
With the growing student intake especially in institutes in metropolitan cities and the consequent shortage of on-campus hostel facilities, OYO LIFE is poised to tap the massive opportunity by providing fully-managed, long-term rental solutions to students.
You recently entered in the student housing segment with IIT Delhi Plaksha. Any more such tie-ups in the pipeline?
We have partnered with IIT Delhi and Plaksha’s Tech Leaders Fellowship to offer our fully-managed housing experience for students. As academic pursuits today require more flexibility and mobility, the demand for fully-furnished, fully-maintained, internet-ready accommodations and innovative services has increased manifold. Recognizing this need, we are providing hassle-free and fully-managed services to students looking for a place to stay closer to their academic institutions. You will hear about more such tie-ups in due course.
Besides the existing ones, which are the key cities you are looking at to ramp up your presence and why?
OYO LIFE is presently witnessing about 85-90% occupancy. It is adding 5000 to 8,000 beds per month. We started our operations in 4 cities — Gurugram, Noida, Bengaluru and Pune — with 100 plus live buildings and 500 plus beds in October 2018. Within a year of its launch, OYO LIFE has expanded its footprint to 5 more cities – Delhi, Mumbai, Hyderabad, Chennai and Kolkata – making it the fastest-growing rental player in India. Now we plan to expand to other cities also in the coming years.
What is your USP? Who are your competitors?
OYO LIFE is different from other co-living players in two key ways. Firstly, we are not a discovery platform or aggregator. We work directly with large developers and independent asset owners and operate an entire building or tower or an independent house. Our buildings are ready-to-move-in, furnished and end-to-end managed properties.
Secondly, we take care of everything from maintenance, security, cleaning and Wi-Fi to furnishing of spaces. We encourage community building & resident activities. We provide affordable accommodations starting from the price as low as Rs 6,500 – Rs 12,999 per bed, per month (depending on the location and size of the room). All our buildings are equipped with essential amenities such as Wi-Fi connectivity, television, refrigerator, AC, regular housekeeping, power backup, CCTV surveillance, and 24/7 caretaking.
Our competition is with who we were yesterday and not with any other player in the market. In a short span of one year, we are already the largest player in this space. The growth in India has amazed us and there is a massive headroom for growth.