Lemon Tree Hotels has announced a joint venture with an affiliate of Warburg Pincus, an American private equity firm, to develop co-living spaces in India. Following this, the mid-priced Lemon Tree Hotels brand will enter into the rental housing business.

Poor accommodation options and high rental costs across key cities are major issues in India. This joint venture aims to tackle this problem by offering affordable and conveniently-located co-living spaces for students and young professionals.

The rental housing projects will be developed using a mix of greenfield properties, refurbishment of existing under—managed or stressed commercial and residential assets taken on lease or acquisition.

The project will see an initial investment of 1,500 crores, followed by an additional infusion of 1,500 crores in equity at the option of the partners.

The Warburg Pincus affiliate and Lemon Tree Hotels will hold 68 per cent and 30 per cent stake respectively, and the remaining 2 per cent will be held by Lemon Tree Chairman and Managing Director Patanjali Keswani.

According to PTI, Keswani said, “Our aim is to operate 1 lakh beds in next seven years.” lemontreehotels.com, warburgpincus.com