Co-Living: What do investors need to know?

Recent trends show investors, developers, and fund managers looking to capitalise on the rising demand for medium term accomodation. Much of this investment is focused on Sydney's coliving sector.

A new report by JLL identifies the following reasons for the growth in this sector:

💡 Sydney as a Co-Living Hub: Sydney leads Australia’s co-living market, capturing over 90% of activity due to population growth, urban housing demand, and supportive planning policies.

💡 Global Investment Interest: International players like PGIM Real Estate and Pro-invest Group are investing heavily in Sydney and Brisbane, repurposing older buildings and constructing large-scale co-living portfolios.

💡 Favourable Planning Environment: New South Wales’ government planning guidelines, revised in 2023, have encouraged co-living development, boosting investor confidence.

💡 Rising Demand for Co-Living: Tight rental markets, growing migration, and interest in community-oriented housing drive demand, particularly among students and young professionals.

💡 Investment Strategies: Investors employ value-add and core-plus strategies, focusing on enhancing property value for higher returns rather than traditional yield metrics.

Examples of recent Market Activity: 

➡️ In early 2024, Sydney-based private developer Freecity purchased a Macquarie Park building for $73m and have submitted plans for 505-room co-living accommodation facility.

➡️ In February 2023, Australian co-living operator UKO settled on a $14.7M purchase of a property in Glebe. 

➡️ In April 2024, a private investor acquired a co-living development in Surry Hills for $15.5m. 

💡 Future Growth Potential: With strong occupancy rates and high rental demand, co-living portfolios are set to expand as more operators enter the market.

Considering a move into this space, either as investor or developer? Contact the expert commercial property finance team at CapStack to review your options.

When it comes to securing and structuring finance for your business or commercial property acquisitions and projects CapStack is the partner you can trust. With unparalleled expertise, a vast network of bank and non-bank lenders, and personalised service, we are committed to your success. 

Let's talk.

The full article can be found here https://lnkd.in/g25gZkhW