Co-living will revolutionise the residential sector in the same way that co-working has transformed the office sector, Lars Schnidrig, CEO, Corestate Capital Group, told Real Asset Media’s Cradle to Grave – Urban Being – The Future of City Living Investment Briefing, which was held in Berlin recently.
‘Co-working has been a hugely successful trend and co-living is set to be equally important,’ he said. ‘The new generations value flexibility over stability, and why would they want flexibility in their working life but not in their leisure time and everyday life?’
In Europe’s up-and-coming cities young professionals have different needs but they want to feel they belong to a community. ‘People are happy to have less private space but more and better communal facilities,’ said Clare Thomas, Partner, CMS. ‘There is a real shift from what is exclusively yours to a community space’.
The sector is new but growing fast, as companies like Corestate focus on developing co-living solutions and innovative concepts to provide these new spaces people want.
‘I like the co-living space,’ said Stephen Miles, who has the newly-created role of Head of Operational Real Estate, CBRE Global Investors. ‘It is an immature but very attractive sector, with occupancy levels at 95% or above, so it gives investors revenue and stability’.
Despite the differences there are in European countries in regulations, culture and tenant expectations, it is possible to have a Continent-wide strategy in the co-living sector.
‘We follow a clear Pan-European city strategy,’ said Schnidrig. ‘We are already in Germany, the UK, Spain and Poland and we are looking to expand to other cities’.
The operational side of the business is key and scale is important to success, he said, because only companies with the right size and resources are able to invest in infrastructure, technology and operations and attract the right managers.
‘Without a good operator it is just bricks,’ Schnidrig said. ‘It is the operator that makes it a student home or a hotel and provides the services that people are happy to pay for’.
Investors realise the importance of the operational side and that is why so many platform deals are being done and more will come, said Miles: ‘Investors buy the operators as a way into the market’.
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