Nestaway rental housing to expand in India’s Tier-2 cities

Nestaway, a managed rental housing startup has closed its financial year ended March 2019 (FY19) with ₹70 crore in net revenue, which is a 49% year-on-year jump, said a top executive. The start-up commenced four years ago in Bangalore, with an aim to provide housing facility to majorly migrant population. It caters to a wide spectrum of population constituting of families, students and bachelors. Nestaway is a provider of managed rentals featuring two formats that includes shared living spaces in apartments and villas as full houses. They range from 1BHKs to 4BHKs. Shared spaces are targeted mostly at bachelors and students while the full house format is meant for families.

In September, Nestaway launched a new vertical ‘Hello World’ for its shared housing format. It is currently functional in 15 cities with a capacity of 10,000 beds. Additionally, Nestaway also has over 25,000 properties under its full house segment targeted at families and works with over 40,000 property owners across both Hello World and full house segments. It also claims to have over 75,000 tenants on both formats.

Even though, Nestaway is progressing with its tenant base, and generating a good amount of ₹8 crore in monthly gross revenues from these cities, 50% of the revenue is generated from Bangalore alone. Now, Nestaway is planning to expand its new co-living product Hello World to more tier-2 cities of Indore, Manipal, Chandigarh, Vizag, Lucknow, Ahmedabad, Cochin, Goa and Vellore by next year. Currently, Hello World is functional in metro cities of Bangalore, Kolkata, Mumbai, and Delhi NCR along with the other cities. 

Nestaway’s most of the tenants move out in less than a year or mostly six months, this has given rise to ‘move-out rates’. It includes certain charges applied on the tenant if he/her moves out before 6 months. According to Ismail Khan, Chief Business Officer, Nestaway, this is done to create a deterrence. Tenants too, pay the charges as the amount is still meagre in comparison to the amount deducted while moving out of a self-rented home. He mentioned that the startup is building prediction technology to predict proper and fixed move-out rates at its properties and other financial disincentives to counter the problem of uncertain charge.

The expansion of such start-ups are influential in the growth of the cities as their presence combats the situation of lack of affordable, hassle free and also sometimes temporary housing.  

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