Coliving is a new community residential model which is quite similar to coworking. In fact, it is actually an evolution of coworking: living and working on your own yet within a community.
We could define it as a model halfway between a shared flat and a student residence. Users have their own room and private space, but they also share many spaces with the community, such as the dining room, kitchen, living room, communal areas, and work areas.
It's a new lifestyle that fosters a sense of community and interactions among residents. The residents share not only spaces but also interests and free time. Plus, they seek to live with other professionals to encourage the exchange of ideas and collaborative work.
Background and expansion
Coliving originated in the United States in the early 2010s, specifically in San Francisco at a time when a housing shortage dovetailed with a rise in young professionals moving to the city.
It is a successful trend in countries like the United States, the United Kingdom, Germany, Indonesia, and Japan. And in Spain, it has begun to crop up in Barcelona and Madrid.
The coliving sector in Spain has more than 500 beds right now, and the supply is forecasted to multiply by five in 2021.
There is a burgeoning interest among developers to construct this kind of residential building in zones like Barcelona’s 22@ and Europa Square in Hospitalet de Llobregat.
However, even though the two largest cities will pick up almost all the projects, they are followed by other cities like Valencia, Donostia, Seville, and Málaga.
Who are the users?
As mentioned above, these are shared spaces in line with what Millennials are looking for. Therefore, coliving users tend to be young adults who want to live on their own yet in a community.
In addition to accommodations and amenities, this group also wants to find other services in addition to just room rental, like cleaning, coworking spaces, and leisure areas (gym, library, swimming pool, etc.).
Therefore, coliving buildings are spaces designed to encourage interactions among their residents. This is why the added value that the building manager can offer, meaning the services they provide, is essential in this kind of asset.
From the standpoint of the real-estate investor, this kind of residential asset offers higher profitability than other residential products. Right now, coliving offers a profitability of close to 5-5.5%, while traditional residential rentals tend to be at around 3-3.5%.
The demand for this kind of product is expected to rise steeply because it has sparked the interest of developers and investors seeking different alternatives. Right now, the largest operators are Inèdit, StarCity, and Vanguard in Barcelona and Urban Campus, Habyt, and Homiii in Madrid. Other companies like Attico DoveVivo and The Student Hotel are also considering launching operations in Spain.