Q. In your view, what are the key wants and demands from residents in Co-Living developments?
The feedback we receive is that a sense of community and events is key, as is the flexibility and length of stay. Some residents may have relocated for work or had a change in personal circumstances and only need something for a short period.
Others want to commit for longer, and some want to try it before committing long term. All-inclusive rents are a real positive, especially with increased cost of living pressures. Residents can therefore budget easily with no added costs or extra gym memberships, for example. Location is still a driving factor, as is the price point. Resident demands are also generally consistent regardless of location.
Q. Have the demands of Co-Living tenants changed in the short time the sector has evolved over the past few years?
The sector is still very much evolving. With few operational schemes, it’s probably still too early to identify trends, especially with a mix of hotel and sui-gen consents. Post-Covid, with the increase in working from home, having sociable and quiet Co-working spaces has proven popular.
Flexibility is also key. Being able to transform a space and its use across the day or week means spaces are better used. Activating them needs a joint approach between on-site teams, residents, clients and managing agents. If a space is not used, it affects the resident experience as well as the net operating income. The size, fit-out and location of amenities such as gyms and media rooms also impact whether they are successful. What’s on offer in the wider community also has a bearing on what’s included and demanded by residents.
Q. Are you seeing students attracted to Co-Living schemes? And if so, why do you think this is the case?
Yes – this is driven by several factors, not least the time of year the scheme opens. If this coincides with the rebooking of student accommodation, then there is likely to be more students applying.
Price point also plays a part, especially as students can make the direct comparison with PBSA and their all-inclusive rents. Some attract more overseas students than UK students, but that is location-specific. Students should not always be seen as a negative as they are generally well-behaved and frequently renew, which reduces voids. However, we’re working on some pre-planning schemes where local authorities are looking to restrict students in Co-Living schemes.
Q. You have experience in managing Co-Living as well as BTR. What are the key differences from an operational point of view that distinguish Co-Living from those other operational asset classes?
There are a range of differences between BTR (multifamily and single-family) and Co-Living. Not least, the Opex – operational running costs. Co-Living schemes have larger on-site teams. More events and amenities result in greater cleaning costs.
Short and long stays in Co-Living result in greater resident churn and engagement. We typically offer 3, 6, 9 and 12-month agreements as well as longer stay options in Co-Living. In BTR, we would expect 12, 18 and 24 months. Therefore, in some respects, Co-Living has more similarities to PBSA than BTR.
Q. What are the operational pain points? Does technology play a part in solving these?
Property management is not easy. Our team have a wide range of responsibilities dealing with finance, budget setting, chasing rent arrears, health and safety compliance, resident engagement, client reporting, people management and more – all in one day!
Having the skillset to work across all these areas should not be underestimated. Property management tends to have an 80/20 split – 80% of it runs smoothly, and 20% doesn’t. The latter could be anything from a major on-site issue such as a flood, electrical outage or wellbeing matter. The teams are constantly re-assessing priorities and dealing with them accordingly. Whilst automation and smart technology can pre-empt some of these issues, we won’t be replacing our people with robots anytime soon!
Q. You also get involved early in the design phase. What are the things developers and architects often forget about?
Exactly, operators should absolutely be brought in to advise at the earliest opportunity. We can add value by identifying operational efficiencies and suggesting ways to improve the resident experience. The examples are numerous, but a few key ones to highlight.
Bins and waste collections. What’s the strategy? The frequency of collection? How many bins are in the bin store? Will it be a private off-curb collection, and what are the associated costs? Will we need a bin tug if there are level access issues, and, if so, where’s it stored? The average person has over 70 parcels delivered a year. If no parcel room or lockers, then it is more than a full-time job for the front of house to deal with. If back-of-house storage is squeezed, then where’s the seasonal paraphernalia stored, and how do all the events run smoothly?
Learn more about our Co-Living services here.