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Warburg Pincus forms Rs 3,000 Cr JV with Lemon Tree to foray into co-living space


Private equity firm Warburg Pincus is setting up a joint venture with Lemon Tree Hotels to foray into co-living space for students and working professionals.

The joint venture will see Rs 3,000 crore investment where Warburg will have a majority stake of 68 per cent. The remaining stake will be owned by the mid-priced hotel chain (30 per cent) and it’s managing director Patanjali Keswani (2 per cent).

Called as Hamstede Living, the joint venture will initially receive Rs 1,500 crore from both entities as equity and the rest capital will be infused later to develop the project.

According to filing to the BSE, Warburg Pincus formed the partnership through its affiliate Magnolia Grove Investment Ltd. In the future, the joint venture also aims to shift the business to an asset-light model, reports Mint.

Like other co-living platforms, the project will include shared spaces like living rooms, gym, and cafeterias in order to provide full stack co-living accommodation.

The development comes after Softbank-backed budget hotel Chain Oyo also entered the co-living space. Oyo would be taking large independent homes, row houses, apartments towers for its co-living offering.

The company said that by the end of 2018, Oyo Living will be available in 5 cities including Gurugram, Bengaluru, and Pune.

With the entry of Lemon Tree in the segment, it will face tough competition from Oyo, NestAway, StayAbode, and Ziffy Homes amongst a slew of others.

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