BENGALURU: Co-living startup Zolostays has started forgoing rental payments of some of its residents, who have been recently laid off as businesses cut costs to stay afloat during the covid-19 pandemic.
Nikhil Sikri, chief executive of Zolostays said the startup will waive off rental payments for eligible residents across all its 450 properties in 10 cities in India.
Around 600 out of its 40,000 tenants, who have lost their jobs, have availed of this waiver till date. Zolo's offer starts 15 June and will go on till August-end.
The rental waiver also covers ex-Zolostays residents, who have stayed in any of their properties in the last 5 years and have been laid off from their jobs, according to Sikhri. They can take up accommodation in their properties and avail the benefit.
The co-living startup is also offering job placement services in-house for residents affected by job cuts through tie-ups with IT firms and other startups.
Sikhri added that the co-living platform had begun receiving requests to reduce rental payments from March itself.
“While we (management) were talking to the community of residents, we found that most have them weren't confident in continuing as tenants as they were unsure about their future and finances, especially with pay cuts and layoffs. After consulting with the board and some property owners, we have decided to forgo rental payments completely for few months to remove the financial burden on our tenants," Sikhri said in an interview.
On the other hand, Zolostays residents are also looking to move into single-sharing bedrooms. Hence, the startup has begun scouting for new properties to meet this demand.
Covid-19 has been a challenging period for many small and medium businesses in the startup space, persuading them to experiment with newer models to increase user engagement and in many cases trust factor as well. Food delivery firms have tweaked delivery and food-handling practices by offering no-contact deliveries to customers, while e-commerce and online grocery firms have also stepped up procurement and retailing of essential goods.
Co-living startups such as Zolostays and Nestaway usually enter into long-term contracts with property owners. These startups take up the space on lease and renovate the premises to their standards and offer bedrooms on a dual or even triple-sharing basis to tenants.
Such business models have provided property owners with greater rental yields between 7% and 10%, higher than the 3% average yield from traditional rental models, according to analysts’ reports in the past.
However, with more tenants expected to choose personal bedrooms, co-living models will have to start consolidating their inventory to meet this demand as well.
Founded in 2015, Zolostays has raised more than $40 million in equity funding from investors like IDFC Alternatives, Mirae Asset, and Nexus Venture Partners. Other investors in the company include Alec Oxenford, founder of OLX, Chennai-based Olympia Developers and Patni Computers Family Office.
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