First major co-living fund seeking $825m for COLIV venture
UK: Co-living developer The Collective and real estate investment manager DTZ Investors are seeking £650m [$825m] in pledges and plans to invest in six to ten fund to buy and build communal housing projects in London.
The COLIV venture, believed to be the world’s first, aims to make ‘lonely’ renters something of the past and drive them away from sky-high house prices towards more niche, alternative co-living accommodation.
The world’s first major co-living fund, as it was labelled by the two companies, has 70 million pounds of seed capital, and its managers aim to build a portfolio valued at around one billion pounds over its ten-year life, with returns of between eight to ten per cent.
In an interview with Bloomberg, DTZ Investors CEO Chris Cooper said: “We definitely expect a first-mover advantage.”
In 2005, the fund manager first invested in British student-housing landlord Unite Group Plc, as purpose-built apartments for students were only just starting to take off.
Co-living developments are made up of small bedrooms or apartments along with large common areas, aiming to engender a sense of community and quick and easy access to a number of services and amenities. Existing brands have tended to cater particularly to young professionals who are being increasingly priced out of buying their own homes.
The fund’s first investment is a 222-room building in London’s Harrow section, which is scheduled for completion in 2021. In addition, through COLIV, it will buy existing properties that have been operated by The Collective during its four-year investment period.
The Collective currently has about 1,650 rooms in its portfolio, with another 8,000 more across the UK, Ireland, Germany and the US currently under development, according to CEO Reza Merchant.
The rent fees have drawn some critics, however, with rates in its West London Willesden Junction district starting at £1,083 a month for a one-person room on a 12-month contract.
To counter feelings of loneliness and bring the communities together, The Collective offer amenities such as cinemas, libraries, spas and, in the latest case, a rooftop swimming pool.
“Financial return is a very important objective but for us as a business, we want to have a positive social impact,” added Merchant.
For more information, visit The Collective’s website here.
