A Delhi-based student housing brand YourShell has been acquired by Stanza Living, a managed accommodation company.
The two companies had been in talks since late last year.
YourShell was launched in 2017 with 145 beds to provide easy-to-book, serviced, and affordable rental homes to students within the North campus area of the Delhi University. Currently, they have over 600 beds across 18 properties.
It is among the youngest startups to raise venture debt under the Government of India’s StandUp India programme.
“When we learnt that they (Stanza Living) were looking at strategic acquisitions for growth, we believed it was the ideal time to pass on the reigns to the experienced team at Stanza Living and become a part of their rapid-scale story,” said Shaifali Jain, co-founder, YourShell.
The real estate sector, particularly the student housing segment, has been impacted due to the current social and economical uncertainty caused by the coronavirus pandemic, according to a report.
According to an EY report titled, 'Impact of COVID19 on the student housing segment in India', student housing has attracted significant investment of 600 million dollars. However, the current situation has resulted in major changes affecting all four stakeholders - educational institutions, students, asset owners and student housing providers and managers.
Gaurav Karnik, partner - real estate, EY India, said, "The B2C model, where most students pay monthly, has seen a larger impact. Students who have left are less likely to pay their monthly rentals for the remaining two months. But most operators have two months of the refundable security deposit which could help them avoid revenue shortfall. However, students could use force majeure as a reason to claim refunds."
Student housing managers and operators are trying to reduce variable costs for services such as housekeeping, security, and laundry by complete closure or offering partial operations. From a cost perspective, more cleaning and fumigation will be required, thus increasing the maintenance cost marginally.
In addition to all this, a larger problem could arise if colleges decide to run the early part of the first semester through virtual classrooms. In such an event, the revenue loss could be close to four to five months.
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