Co-living has recently become the new way of living for thousands of young professionals. It represents a more convenient way to live in the center, in a comfortable space and with all the utilities and facilities needed.
Looking at the exponential growth of the co-living industry from a business point of view, it is interesting to understand why it can be a fruitful market to invest in.
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What Is Co-living?
Co-living is a new housing movement characterized by communal living where people live in the same building, have their own private room but share all of the communal spaces. The renters pay a monthly bill that includes all of the essential services, such as internet, housekeeping, laundry, and facilities that might be present in the building such as working spaces, gym, and cinema rooms.
Thanks to these characteristics, this type of housing are very common between young professionals and remote workers because it gives them the chance to live in a place where they can live, work and create a community of people.
Choosing co-living spaces allows living in a dream house, right in the center, with all the amenities needed and everything at an affordable price.
Why Invest In Co-living?
The growth of the co-living industry can be linked to 4 main socio-economic factors that also represent the main reasons why investing in co-living can be a winning choice.
- In recent years, the housing market went through an ‘affordability crisis’ due to the shortage of houses. The price went up and the younger renters found themselves without an affordable choice. Co-living represents a real solution for those consumers in the housing market who are uncatered for, offering an accommodation with everything they need and with flexibility.
- Nowadays working from home is the new way of life. The digitalisation brought so much possibility to workers that now are becoming every day more remote. The new need is a space where to live without long engagements, to be able to work effectively and where to find company next door. Co-living is the answer giving rooms with flexible arrangements and spaces conceived to be used for co-working. In the future more and more digital nomads will look for places where they can stay for a short time, with amenities and community life and Co-living will provide them with what they need.
- Loneliness was a common feeling between many during the lockdown and after being unable to live normal lives, people have changed what they require from a house. They want to be able to socialise, to be part of a community and engage with people to overcome the fear of being alone again. This new style of co-living can give to people community hubs that will help them feel less alone and create networks that can help them personally and professionally.
- The awareness of the principles of the sharing economy had had a big impact on the younger renters. The nature of the co-living concept itself lives in sharing and the possibility to live a more eco-friendly lifestyle it’s what appeals the most to the new generations.
Investing In Co-living
A co-living empire can rise in the form of hotel-like co-living spaces or residential houses turned into functional co-living accommodations.
The potential pool of investors is therefore quite wide and the active developers in the market fall into these two main typologies.
- Co-living specialists aim to create new constructions designed for hotel-like co-living, where they think deeply about the services and amenities they want to offer. One example is The Collective, which recently launched a joint venture with DTZ IM to boost their development.
- On the other side, those who see in co-living the perfect opportunity to diversify their property portfolio, usually invest in the renovation of old residential and commercial buildings. Turning a space into a functional co-living space can be the way to unlock difficult sites or assets and become a profitable business addressed to the average consumer in the market, such as students. One example of this type of co-living in London is the Co-Living Group, which aims to create accessible accommodations with all the co-living perks but for a more affordable price.
The Prospect Of Co-living In The UK
With the growth of remote work, the fear of being alone again, and the emerging sharing economy, co-living schemes are a very attractive facility for young professionals, digital nomads, and students. Thanks to this new kind of buildings with amenities, everyone can have the possibility to live, work and in the meantime socialize in the same place and for an affordable price, without having to fear another lockdown.
Co-living has become a real phenomenon in the UK and many property managers have already shifted their interest to this quite recent business because they have seen the potential hidden in it.