Co-living is revolutionising city living

By Peter Young / EdgeProp Singapore | September 14, 2018 6:25 PM SGT
A new real estate asset class is attracting significant attention and pulling property investors back into cities such as London and Singapore.
Co-living apartment blocks offer private rooms that individuals can rent on flexible leases, starting from just a few days. In exchange for smaller private spaces, the apartments offer significant communal amenities that merge business and pleasure, with large living areas, shared kitchens and co-working desk spaces. Some co-living apartments even include gyms, spas, restaurants and cinemas.
London is suffering from low rental yields and declining house prices (Credit: Bloomberg)
These developments are drawing investors’ attention back to London, a city that is suffering from low rental yields and declining house prices. Co-living developments in the UK are appealing to the 17 million millennials and 1.7 million full-time students who live and work there. Currently, there are only 600 co-living beds available, so the opportunity is considerable.
This is the real estate evolution that investors have been waiting for: city-centre living that is affordable and attractive to a new generation of renters who are looking to combine the benefits of the digital age with the comforts of modern life in central locations. The institutional interest is also increasing as this important market potential is finally being fulfilled.
In central London, rents have not kept up with the pace of house price increases after the global financial crisis, so yields have declined. Rents are at record highs, however, and the cost of living is exceeding earning capacity for many residents.
In central London, rents have not kept up with the pace of house price increases after the global financial crisis, so yields have declined (Credit: Bloomberg)
In London, average rents are £34,622 ($60,733) a year and average salaries only £34,473, so most people have to consider home sharing or long and expensive commutes to live more affordably. On the other hand, co-living rents are all-inclusive and competitive. The monthly rental fee covers your apartment, furniture, WiFi and utility bills, as well as access to communal amenities. This makes it...