UK: A rise in institutional investment and growing demand for flexible living space are aiding a surge in Europe’s co-living sector, according to a new report from JLL.
JLL’s European Coliving Index reveals that there are now over 23,150 co-living beds either built or in development across Europe, but policymaker support is still required to help the sector reach its full potential.
It defines co-living assets as those where tenants lease “optimised personal areas” and share communal spaces and amenities, and says they offer a flexible and modern solution for the changing lifestyles of today’s urban populations, with surging institutional investment now allowing the sector to scale at pace throughout Europe.
Some 53 per cent of current operating assets have more than 100 beds, but this is set to rise to 79 per cent when those in the planning stages are complete, and the average development size is expected to increase to more than 250 beds.
“Co-living assets are disruptive and innovative solutions for the changing housing needs of the modern urbanite, particularly in areas where supply and financial pressures are increasing the demand for more flexible living space,” said Richard Lustigman, director of living capital markets, co-living at JLL. “Co-living products offer choice in a market short of options and the sector’s growth potential is huge. It’s essential that legislation is put in place to protect occupiers, support its value and enable its development so that pipelines can extend beyond their current numbers.”
The report says that Europe’s co-living stock is heavily concentrated in the continent’s capitals, with London, Amsterdam, Paris, Berlin, Dublin and Vienna leading the market.
London and Amsterdam account for nearly 40 per cent of Europe’s overall co-living stock.
The UK is a particularly strong growth market, with London holding more than 20 per cent of the current European market, and Manchester, Glasgow and Birmingham also ranking in the top 20 co-living cities in Europe. With 85 per cent of the UK’s co-living assets still in the pipeline, the sector is set to experience healthy growth.
“Co-living accommodation will play a leading role in future city structures and increasing institutional investment has established the sector as a competitive part of the broader property market,” said James Kingdom, an associate director at JLL responsible for alternative sectors research. “Going forward in Europe, growth will be particularly spurred by younger city demographics taking their first step on the property ladder – such as the fast-growing post-graduate and post-PBSA populations who are calling for more convenience and choice in housing.”
