Zolostays Sells Student Hostel Business to Good Host Spaces for INR 107.8 Cr The deal involves the complete transfer of Zolostays' business segment that manages hostels for colleges and universities, including associated assets and responsibilities.
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Zolostays Property Solutions has announced the sale of its student hostel management business to Good Host Spaces Management Services for approximately INR 107.8 crore. The decision received shareholder approval during a special meeting held on Friday.
The deal involves the complete transfer of Zolostays' business segment that manages hostels for colleges and universities, including associated assets and responsibilities.
According to the company, 90% of the transaction value will be paid in cash, while the remaining 10% will be structured as a convertible instrument, potentially giving Zolo a stake in Good Host Spaces in the future.
The sale marks a strategic move for Zolostays, allowing it to sharpen its focus on its core operations. The company stated that the divestiture will help improve cash flow, strengthen financial health, and enhance operational efficiency.
Good Host Spaces, the buyer, is a prominent owner-operator of student housing facilities. In October 2023, the firm saw a major ownership shift when real estate investment firm Alta Capital acquired it for USD 320 million (approximately INR 2,700 crore) from former investors Goldman Sachs and Warburg Pincus. Currently, Good Host Spaces manages around 25,000 beds across five cities in partnership with universities.
Following the sale, Zolostays is doubling down on its transformation into a premium accommodation brand. The company has started curating high-quality properties and redesigning existing assets to elevate them into higher-tier offerings. This repositioning has improved its pricing power, and Zolo anticipates achieving profitability within the next two quarters.
Financially, Zolostays saw a marginal revenue increase to INR 44.8 crore in FY22, with losses narrowing by nearly 25% to INR 67.5 crore, down from INR 89.9 crore the previous year, primarily through cost optimisation.
