10th September 2020, India: Nestaway Technologies, India’s largest home rental company with over 60,000 homes across 16 cities, today announced restructuring with the launch of partnership/franchising model. This strategic move will help in expanding to smaller cities and towns in response to the reverse migration caused due to the on-going global pandemic.
COVID-19 has caused massive disruption in the home rental industry especially in cities as there has been massive reverse migration of youth to their hometowns (estimated to be as high as 50% in cities like Bangalore, with over 30% of homes in Bangalore now lie vacant- As per reports published online). Job loss/salary cuts have also added to the cause. Nestaway, in response to this changing dynamic in the market has decided to extend its services to manage rental homes of owners in Tier-2 cities and outskirts of Tier-1 cities in a franchise model to cater to the growing needs of rentals in these locations. As part of this new model, the independent property managers would have access to the same product, technology and know-how as our existing on roll property managers.
“We need to be where tenants are. Pre-covid, tenant base was crowded in central business districts and few busy areas in Tier I cities. We see a tectonic shift in consumer behavior now. With over 85% of tenants with us belonging to knowledge jobs, they now prefer far off locations and nearby smaller cities as the rents are cheaper and they do not have to commute to work daily. While our existing model works best in busy pockets of the city and offers a full-stack service to make living easier, post Covid, customers want less rent and less services. That is why we are taking the decision to add a franchised version of our services so that local entrepreneurs can customize it as per the need of customers in their geographies. That way the service becomes available to more people and more jobs also get created” - said Amarendra Sahu, Nestaway’s co-founder and CEO.
Based on its internal migration and tenant exit data, Nestaway has seen tenant churn in line with the migration data. Over 10,000 people have vacated their rental homes in the last 3 months and have gone back to smaller cities/hometowns.
Since the start of July 2020, Nestaway has seen a 3X upsurge in owner requests from smaller towns and cities asking us to manage their homes which we used to turn down earlier under serviceability grounds. With the changing market dynamics, Nestaway will also be launching a product offering to solely cater to this.
With the growing acceptance of buying services online, Nestaway is confident of finding both owners and tenants beyond metros and doing at least 30% of its business from non-metros in the next 2 years.