Oscar Wilde
GSAIR 2023 44
to see many more developments being built across the country over the next few years . Co-living properties often have minimal length of stay restrictions , meaning rooms can also be let during peak seasons for short periods with housekeeping bundled into the rental price . Could this fledgling asset class one day eclipse serviced apartments entirely ?
Illusion or reality ?
As lines continue to blur , it seems that Co-living is here to stay . The sector is estimated to have a potential core target market of 725,000 residents , including almost 160,000 in London alone . Considering that there are currently 24,000 operational and pipeline units , the scale of the opportunity is significant .
Co-living could be the right product at the right time ; 79 % of renters in the two largest operational Co-living schemes , The Collective Old Oak and The Collective Canary Wharf are aged 18 to 35 . 21
Meanwhile , there are almost 200,000 individual BTR units either completed , close to completion , or in planning with estimates suggesting that completed BTR homes could reach 380,000 by 2032 . 22
Independent operators currently account for over 40 % of UK serviced apartment supply , so we are likely to see more one-off or unique properties targeting niche markets – especially in London . However , as of June 2022 , serviced apartment operators with a unit count in excess of 400 units , represent some 45 % of the total UK supply . 23
At its core , institutional capital demands long-term safe income ; presently there are a few different ways to get that , and that ’ s what ’ s accelerating a blurring of lines .
The conclusion is that there ’ s room for each of these formats , providing they remain relevant , are marketed effectively , and provide investors and developers with the required returns .
21 . https :// www . savills . co . uk / insight-and-opinion / savills-news / 329164-0 / savills-projects-rapid-growth-of-uk-co-living--sector-to-see- % C2 % A3540m-of-deals-in-h1-2022--the-firm-says 22 . https :// centrick . co . uk / news / expert-opinion-the-future-of-btr-in-the-uk /#:~: text = According % 20to % 20research % 2C % 20there % 20are , could % 20 reach % 20380 % 2C000 % 20by % 202032 . 23 . https :// www . knightfrank . com / research / article / 2022-08-16-a-fragmented-market-continues-in-the-uk-serviced-apartmentsector #:~: text = Some % 202 % 2C300 % 20units % 20have % 20permanently , over % 2040 % 25 % 20of % 20the % 20supply .
“ I have the simplest tastes . I am always satisfied with the best .”
Oscar Wilde