Affordable Housing Is A Big Problem For Bachelors In Dhaka, Neways International Company, Founded By Two Chinese Entrepreneurs, Sees A Big Opportunity There

Neways International Company is a co-living company that offers housing solutions for singles in Dhaka. Founded by Zhang Li Guang, Managing Director, and Zhang Zhimin, Chief Operating Officer, two Chinese entrepreneurs, who came to see an opportunity in offering better living facilities for singles in Dhaka, the company says it aims to “transform the human habitation globally with revolutionary models and technologies.”

Founded in 2014 with two pilot projects, one in Aftabnagar and the other in Kathalbagan. After the success of its initial pilots, the company opened its first Super Hostel in Uttara in October 2017. Today it has 6 hostels across Dhaka and provides accommodation facilities to 12000 bachelors. The company offers managed living space to bachelors for monthly and daily fees, tk. 7000-8000 to tk. 233-266, respectively.

What you need to know

• Number of Hostels: Neways International Company Ltd has already set up six hostels in the capital: one each in Uttara, Badda, Baridhara, Shahbagh, and two in Mirpur. Five of them are for males and one for females. Now, they are planning to set up 100 hostels in Dhaka city.
• Number of Students: Now, almost 1200 people are living in these hostels and 70 to 80 are female of them.
• Available Opportunities and Individual Cost: The monthly cost of one individual is 6999 tk without lift opportunities and 7999 tk with the lift opportunities. Apart from that, the hostel offers multi-functional beds, a luxurious lobby, 24-hour security, reading room, personal locker, three times meals and an air-conditioned environment, washing machine, Wi-Fi, housekeeping services, hairdryer, smart TV, gym and a play zone. Super Hostel also equipped with a generator and fingerprint door.
• The company has already invested about Tk 25 crore in the project and plans to invest further 350 crore in the next couple of years. In the near term, the company plans to open 100 hostels in Dhaka City.

Takeaway

Affordable housing is a big problem in Bangladesh. For singles in cities like Dhaka, it is a tremendous hassle. The situation is no better in any other major urban hubs in Bangladesh. The potential market for affordable housing for singles is huge.

There are multiple layers to this challenge. The first layer, it accommodation alone, which is a real-estate play. Neways partners with building owners for offering accommodation. It seems that the collaboration with building owners is not of mere leasing and renting.

The second layer could be serviced for the people who live there. Neways already offer basic amenities such as wifi and others as part of the package. Then there are other more personalized services for different groups of users. This could be the next level of expansion opportunity for Neways.

A recent story on Neways International at the Daily Star received quite a reception on the internet. Many readers expressed their opinion about how big a market that is and so on.

While it appears to be a huge market, which is true, and a greenfield for building scalable companies, which is not true, there are reasons to be cautious.

There are several aspects that demand attention.

First, there is already an unorganized hostel system in play in the market which is relatively cheaper, albeit with less facilities than what Neways offers, and thus affordable for a far greater number of students, the main target segment for Neways. This means there already is a competition. To my reading, it would be very hard to break this competition.

The second, real estate is expensive in Bangladesh and it is quite an unpredictable market. These two factors could be two major sources of challenge for Neways and any similar players in the market who aim to disrupt the affordable housing market for bachelors in Dhaka.