‘Coliving sector poised for continued growth despite IT, startup hiring slump’

Coliving space within the real estate sector has been growing steadily as corporate employees look at these properties for convenience, and better living conditions coupled with community feelings. Hyderabad-based Boston Living is one such coliving operator, which has seen steady demand for its facilities. In a conversation with the Bizz Buzz, Tauseef Hassan Ibrahim, Business Head at Boston Living said that the company is planning to enter Bengaluru in the coming months. It is also in the process of taking over a 1,000 beds boutique hotel at GMR airport in Hyderabad. The company is focussed on developing large coliving facilities with a minimum of 400 beds, so that it can replicate its experience of managing 550-bed coliving facility at Kondapur in Hyderabad.

According to Ibrahim, the coliving operator is looking at 2,000-2,500 bed capacity in coming years. The company will fund its expansion through internal accruals as it is not looking at raising external capital at this point of time. He said that the hiring slowdown in IT and startup ecosystem is a concern, but existing staffers are driving the growth of coliving operators as of now

How is the overall demand environment in the coliving space? Can you give a brief overview how 2023 so far has panned out and what is the outlook?

The year 2023 is a great year for all coliving players across the country. Especially, we see certain movement happening from Bengaluru to Hyderabad because of the way many businesses function. We also see many companies moving from Bengaluru to Hyderabad. Organisations in Hyderabad are further expanding their campuses and employee base in the city. These are the reasons that coliving market in Hyderabad is witnessing strong growth. This year, we also realised that customers were not only looking for affordable living, they were also willing to pay a premium if all the amenities and facilities were provided under one roof.

As far as growth prospects in 2024 is concerned, we see the momentum continuing. As more companies set up centres in Hyderabad, we see better growth prospects going ahead. Also, there is good demand for premium coliving spaces in cities like Bengaluru. Mumbai, Gurgaon, and other urban centres, demand for coliving spaces remain strong. So, property addition in these cities will happen in coming time.

What are differentiating factors that Boston Living bring to the table as compared to other operators?

We call ourselves as premium coliving operator. This is very different from PGs. The kind of amenities and facilities, we provide is very different from others. That is the reason that we have seen good demand for our properties among customers. We have seen that people are willing to pay more for premium services. That is the reason that we have never lost business owing to hike in pricing of our services. We serve a different set of targeted customers, who are looking at housing facilities that provide good experience. For instance, we hold community events at regular intervals. From music band event to tax planning, we organise various community events at our coliving centre, which is almost free to members of Boston Living. These events also provide excellent opportunity to network.

What are your business expansion plans? Do you intend to increase your footprint beyond Hyderabad in coming year?

Currently, we have presence in Hyderabad. We have one unit in Kondapur, which has 550 beds. This is one of the largest facilities of coliving in India. Apart from this property, we have a boutique hotel coming up in GMR’s airport. The construction is on and we are looking at going live by June, 2024. Coupled with these properties, we are also looking at couple of student-living opportunities in Bengaluru. We are looking at opening up a property near Manyata Tech Park in Bengaluru. That property will be very similar to what we have in Kondapur of Hyderabad. The target is to where people can go out and work; go out to restaurants and eat & enjoy. That prime location is very important for us. We don’t function like other coliving players. Many players operate coliving properties which are 30 or 40 beds. But we are only focussed on operating larger properties with a minimum of 350-400 beds.

Because we want to inculcate the learnings of managing 550-bed Kondapur property in other places. So, in 2024, we will certainly enter the Bengaluru market. Our current bed capacity is 550 in Kondapur and the one coming up at GMR airport will be of 1,000 beds.

We see hiring has come down in the IT services and startup ecosystem. Does this factor affect your business? What is your level of dependency on the staffers coming from these industries?

Of course, it affects us and all other players. But what we are positive about is that we have seen a lot of movement in the existing staffers space, who are staying in rental apartments. These people are willing to move to a coliving space given the convenience. So, new hiring or employee addition is one aspect of our business but this factor is likely to drive our business. Additionally, we do a lot of corporate business. These corporates provide one week of free stay for new employees or staffers in the transfer case. As far as employees of GCCs (Global Capability Centres) are concerned, we will also cater to their employees. I also want to highlight that we provide services to CXO-level employees. That is the reason that we have separate category of services. Currently, we have four categories of services starting from bronze ending at platinum.

Can you throw some light on the growth rates of Boston Living in recent years? Are you financially healthy?

Whatever revenue target we have for FY24, we have already achieved those numbers by September itself. So, last three months (starting October), which are considered the business months for accommodation partners, are actually bonuses for us. So, the growth has been tremendous. We are also optimistic about the growth prospects for next year. The confidence comes from the fact that we have very healthy repeat business. Community living events are playing a big role in getting the repeat business.

What are your hiring plans going ahead?

As we look at setting up new properties in Bengaluru, we will be actively hiring. We have a trained staff base in Hyderabad, who will also be given opportunities for showcasing their talent in new centres. At our Kondapur centre, we hire a lot of interns and train them.

Have you raised external capital so far? Will you look at raising capital in coming quarters for funding the expansion plan?

We have not raised any external capital. As far as raising money is concerned, we will take a call at the time of setting up new properties. However, we may look at a partner who understand our vision. But, we are not actively exploring anything at this point of time.

As far as focus area is concerned, we will remain focussed in workforce living. Of course, we are actively looking at student housing as well. We have a tentative target of 2,000 to 2,500 beds capacity in coming years.