Our relationship with technology transcends several paradoxes: we are its creator, and it is our master; it liberates us but shackles our time; it connects us yet leaves us feeling quite alone.
This latter point is particularly true for younger adults starting out in careers or studying. A report on loneliness published last year from the Office for National Statistics identified three profiles of people at particular risk from loneliness, including younger renters with little trust and sense of belonging to their area. These are young professionals actively sharing and engaging their lives online but unable to access a physical community and the benefit that brings.
It is against this backdrop that co-living is being championed as a way of building communities and fostering social engagement in dwellings. Co-living is not a new concept: for most, co-living was flat-sharing forged out of financial necessity. It had multiple set-backs: difficulty in finding a place; inflexible check-in / check-out; arduous billing arrangements; a lack of amenities and facilities; and remoteness from friends or colleagues.
The future of modern co-living is a far different and far better proposition. It recognises that its customer base (typically, 18-34 year olds) value experiences over ownership. Modern co-living allows renters to occupy their own space but share amenities as well as participate in events in a cohesive community assisted by a skilled building operator.
The sector has the potential to grow rapidly, offering choice and flexibility for tenants as well as significant potential for investors seeking sustainable returns for their capital. Certain entrants are establishing a small foothold in the sector, but the real opportunity will come with scale. In my view, large-scale co-living can be an ideal response to the needs of London’s solo-renting housing market. Purpose-built student accommodation has revolutionised the student lettings market over the past 15 years, and it is clear to me that large-scale co-living has the potential to deliver the same impact to the private-rented sector in London over the next decade.
For these reasons, we launched COLIV with global co-living pioneer The Collective. COLIV is the world’s first large-scale co-living fund, with an aim of raising up to £650million of capital. We are seeking to acquire, or forward fund, between six and ten purpose-built, large-scale co-living assets, all in the London area with an estimated gross asset value target of £1bn.
It’s an important step in the development of our business to be leading the market in delivery of an innovative solution to London’s housing shortage for solo-renters. This fund will bring a strong social agenda through the properties we create, how we engage with our communities and in the way we foster wellbeing in our members.
Alongside the investment opportunity, our guiding principle is to have a positive impact beyond the four walls of our real estate. We want our buildings well-designed with sustainable principles and we want them well-managed to retain their efficiency and effectiveness. The fund aims to create a gold standard benchmark for other co-living operators to follow such as targeting BREEAM excellence standards.
Our aim is to engender a positive social impact within our assets and within their communities. A range of self-improvement and self-actualisation programmes are aimed at developing and nurturing members in our buildings. We also aim to improve neighbourhood accessibility by opening up buildings for use by local community groups. A portion of the fund’s rental income will also help local community initiatives which have aligned social objectives, of bringing people together and preventing loneliness.
Large-scale co-living will have a dramatic impact on big city living providing a growing alternative asset class for investors. However, for it to fulfil its purpose it is critical it is done with the principles of quality, convenience and community at its heart.
As one resident of The Collective’s Old Oak Common asset put it “I could be in a building with five hundred anonymous people that I don’t know. Here, it’s about five hundred people that I want to know.”
Chris Cooper, CEO DTZ Investors