I was very interested to read about a number of good sized co-living developments being planned for Dublin and, particularly interstingly, Dun Laoghaire.
The company involved, Bartra, quote a clear definition of their young, target customer. From a business point of view that seems very smart, and probably works best for these larger developments. Personally, I believe co-living has many markets, and a lot to offer many different types of people. It may even be that coliving is at it’s best when embracing diversity within shared environments.
I read this comprehensive and balanced article a while ago but revisited it today. I thought it would provide a really good introduction for anyone who isn’t really sure what ‘co-living’ is and why it could be worth their investment.
The article even clearly defines the difference between ‘co-living’ and ‘co-housing’ together with both positive and negative opinion from current and former residents of both types of development.
The balance is good, exploring the pros and cons, and discussing whether co-living is really just a way for developers to squeeze the living space and cram as many people as possible into their developments.
My one big take home from it though is the social aspect. I firmly believe the current drive for larger developments, ostensibly to achieve required economies of scale, actually destroys the social cohesion that is the principle desire of a large proportion of the target residents.
I believe these large scale schemes actually reduce the social cohesion and provide greater opportunity for conflict. After all, we know the optimum size for an HMO is 6 people and that co-living works best from a social perspective with 6-12 people sharing resources.
My personal vision for getting those scale economies is to have a large number of smaller units, sharing resources and facilities across sites. Each ‘unit’ works on its own but gains by sharing across a network of local and national resources.
Read this article with that goal in mind and if the idea of developing co-living units interlinked across sites has any resonance, get in touch!
In a potentially landmark decision, the Stirling Prize for the UK’s best new building was awarded to the Goldsmith Street social housing development in Norwich.
Not only is it the first time the award has been given to social housing, it marks a significant change in focus for the jury. Last year’s award went to the £1.3bn Bloomberg headquarters for being the most sustainable office building ever conceived – despite importing 600 tonnes of Bronze from Japan and granite from India.
The hope has to be that this award will help shape the direction of housing provision to come. The design is led strongly by social efficacy as well as environmental efficiency. Houses have doorways facing each other, encouraging social interaction, there are communal as well as private play areas and social spaces, and at the front, the design of the street has cars very much secondary to prioritising the movement and interaction of people.
When I’ve seen the new residents interviewed on the news, the response has been overwhelmingly very positive – many people just couldn’t see themselves ever moving out. Now that is an enviable level of satisfaction. Let’s have lots more.
Now – in a personal postscript to this – I have long been espousing the value of great social design in co-living spaces but actually, we have a potential project which we’re looking to bring to fruition next year, in which we had already identified the great value in creating a ‘street’ feeling for a group of holiday cottages and serviced accommodation apartments. Although the ‘street’ will always remain a right of way, the majority of the time vehicles will not be allowed anywhere. We want to encourage the feeling of ‘ownership’ of that area, by the people who are staying there, enabling parents to comfortably allow their children to play with each other outside.
This project is incredibly ambitious and we hope to be able to let you begin to see into it very soon. Fingers crossed!
It appears WeWork has expanded too fast, too far and wide, and too thinly. Whereas the product models, of both WeWork and WeLive, are most definitely finding favour with consumers, the financing model is becoming ‘problematic’.
WeWork has pulled their much vaunted flotation amid signs their expansion has been overly aggressive. With the back-loaded nature of the agreements they have signed, there are rumours WeWork will run out of cash in 2020 unless one of their major backers provides more working capital. Of course, additional funds cannot be ruled out, and are probably likely, but when a flotation at around $47bn is pulled, with the share price receding so the company valuation is now closer to $10bn, some ‘restructuring’ looks inevitable.
WeWork is undoubtedly the most significant driver in this market but perhaps their short term problems open a window of opportunity for others to follow an adapted model. Their co-working product works well. Their co-living product is less well tested. Opportunities abound for agile entrants to hone the commercial model, using the best of the proven product strategies with a more secure financing structure. It feels like there is a significant opportunity, right now, to catch up and nip at their heels.
During our journey through life we experience many boxes; the box we live in, the box we learn in, the box we travel in. And then there’s the box we think in.
Society generally dictates we accept the way things are – it has always been that way, therefore it willalways be that way. But inside, we know in our gut, there is a better way.
This article is extraordinary. It brings together so many aspects of what I believe about Property and the way we use it as different societies. It must be true that there is no set way for everyone to live but there are many different ways.
The trick for an investor in property is to spot the opportunities from lifestyle changes. The closer you watch society, watch the changing, developing needs and developing importance of those needs, then there is your developing niche.
And niche can often become mainstream. That is the goal. Make the product so goodfor society, so apt to the times it becomes so desirable that everyone in your target market aspires to it. Then expand the options to expand the market reach.
Except for it getting me thinking, none of the above says anything much about the article to which I linked! I suppose is right and proper … I’ll just let the professional journalist express some of my shared vision for the co-living environments of the near future.
I found this interesting article the other day. It’s refreshing to see a positive attitude expressed on HMO lending.
Of course in reality, there are still lots of hoops to jump through, perhaps more, but the products do offer more options. Top slicing for one.
In the Reporter article they quote ‘high than average’ rental yields of 6.3% for HMOs, compared to market average 5.0%. You have to assume those are ‘net’ figures – I mean, I’m not settling for that gross!
For me though, there’s one negative criterion – maximum 8 bedrooms. I’m looking at a co-living product that should perform best with projects averaging 10 to 12 rooms. However, if I find an <8 that works, I’ll be looking seriously again at these financial options!
An all-party parliamentary group on housing and care for older people has released a report warning of an impending crisis in renting for older generations.
According to chair, Richard Best, “The number of households headed by someone over 64 will treble over the next 25-30 years … unless at least 21,000 suitable homes are built a year there will be nowhere affordable for them to live.”
Since we all know that the general population is living longer it seems obvious that specific strategies need to be enacted to deal with the changing demographic. Whether this is led by Government intervention, or is simply entrusted to the Private Rented Sector is the current question at hand.
At SLK we are acutely aware of the changing needs and have been looking at opportunities within rental housing for the older demographic. In this sector, as big fans of co-living, there appears to be an increasingly viable (and valuable) niche opportunity in creating high quality ‘shared housing’ products aimed specifically at older rather than younger generations.
There are so many benefits to co-living it feels like a ‘no-brainer’ to formulate rental products for that ‘post family home’ age, which deliver comfortable, sociable, caring living environments. It is an area we are passionate to explore with like minded partners.
The co-living model is developing fast in the USA. There are new entrants all over mainland Europe. And now we see that a German company has secured €1bn to invest in 35 co-living properties creating space for 6000 residents over the next 5 years. The press release states that developments will be located in Austria, Spain, Switzerland and Poland. So what about the UK?
We believe there is another, more agile, way to bring capacity on stream more quickly. To start earning those returns and enable, fast organic growth. To rapidly respond to the changing customer demands. To create a quality, aspirational, socially and environmentally beneficial product accessible to many, many more potential customers. To actively expand the product reach and give local communities decentralised social and economic empowerment.
Properly delivered, co-living has the all qualities to empower genuine social and economic change not just in large cities but everywhere. It is time the UK committed to co-living in a BIG way with vision and ambition.
We have a fantastic opportunity to convert a commercial premises in Harrogate which we wish to use as a ‘flagship’ property supporting the establishment of a wider ‘co-living’ property investment business. We would love to speak with anybody who thinks they may be able to help me achieve ambitious goals and quickly scale the wider business to a national presence. We have a Business Proposal Outline for those who are interested.
The current property we have our eye on needs moving on very quickly -we would like to put an offer in as soon a possible, as it will definitely go! We have detailed spreadsheets illuminating a variety of exit options – which we are happy to provide.
We have development teams in place and with suitable experience, having most recently undertaken a 35 bedroom student development with a JV partner (now sadly deceased – therein lies a helluva story!) which we have held and are managing.
Although we are principally seeking a business partner, the current property in question has multiple exit options including planning underway for conversion to 7 flats which could be sold for GDV c.£935k, or held for use as single lets or SA. If it used for the wider business, any investment could be corralled in a project specific SPV with 1st or 2nd charge (dependent on purchase finance options) or invested in the business to enable the purchase and development of more than just this opportunity. Outside that business, we may be happy to assist in packaging it as a deal, providing you with any required range of services from simple sourcing to full development and project management to completion.
We are quite protective of the wider Business Proposal as we think there is a fantastic opportunity to exploit and actively expand the growing ‘co-living’ market. If you seriously think you would like to be involved in a co-living business that could really go places we would really love to talk with you.
The Business Proposal is written, the full Business Plan is ‘in progress’, the market is maturing and primed for ‘disruption’. SLK are moving into the co-living arena with our new project(s) and we have ambitions. BIG ambitions (but not BHAGs – and if you don’t know what BHAGs are, consider yourself lucky!).
While researching the current market offerings and defining the niche we want to explode I came across this article from Money Observer which offers some encouragement to investors who are looking at co-living and thinking “is this a space worth serious consideration?”.
I hadn’t read this article before preparing our Business Proposal but many aspects of it are exactly the things I’ve said. It’s really good to have some confirmation we’re on the right track with our ideas. After a bit of a public hiatus (we’ve been working furiously out of sight!) we will be much more visible from now on. Watch out – you have been warned!!