Coliving is already a trend in itself. Accounting for 24,000 total and operational coliving units and an estimated target market of 725,000 people, the UK’s coliving pipeline continues to go from strength to strength. In 2023, we expect to see strong tenant demand accelerate Coliving’s transition into a mainstream residential segment and a greater tech focus transform the coliving industry’s operational models. Here’s our top 10 coliving trends to watch.
- Increased affordability
Although rising inflation and energy prices will increase the cost of coliving provision in the UK, the affordability gap between coliving and the private rental sector (PRS) is expected to increase in favour of coliving. Using an app to pay for one ‘all-inclusive’ monthly bill for living expenditures (i.e. instead of separate bills for rent, energy, council tax and gym memberships etc) boosts affordability and makes it easier to maintain a better standard of living. For example, Cushman and Wakefield calculated that coliving residents could make a 15% saving versus PRS + bills.
- Mainstream in large cities
Urban centres are swelling with two-thirds of the population expected to live in cities by 2050. There is an increasing need for affordable, flexible, hassle-free accommodation for young professionals. Step forward, coliving. Cheaper than build to rent models (BTR), coliving spaces will contribute to alleviating urban density and become an increasingly common presence in cities as a result.
- Regional variation
But it’s not just big cities. For instance, coliving units in the UK are now split 50/50 between London and the regions (i.e. Manchester, Birmingham and Leeds), with the latter accounting for 60% of planned units over the past three years. In addition, thanks to the remote working revolution and the rise of digital nomads (which local and national governments are actively courting), more coliving developments will spring up in rural, coastal and mountainous locations, like Sun and Co on the Spanish coast or Coconat in rural Germany. Coliving tech will make it easier for operators to open and run multiple sites.
- Hybrid hospitality
Coliving and coworking will become one. Whether indirectly through coliving and coworking collaborations (i.e. residents getting 50% off at a partner coworking space nearby) or directly through coliving developments offering specialised office areas (i.e. Social Hub’s coworking and extended stay offer or Zoku’s home-office hybrid), the fusion will start to become the norm in 2023. As part of the ongoing trend of ‘hybrid hospitality’, expect to see more coliving spaces become all-encompassing community hubs where people eat, drink, work and sleep, all managed through the same tech platform.
- Multi-demographic demand
Coliving residents are no longer just young professionals. From students to seniors, digital nomads to empty nesters, more demographics are enticed by the flexible living arrangements and hotspot locations offered by coliving concepts. As such, operators will provide specialised offerings - such as luxury coliving (i.e Treehouse in Los Angeles) or senior-specific living (i.e. Priya Coliving for 65+) - but also different stay lengths. Flexible stays not only allow nomads to book units for one month and retirees to book for multiple years, but also increases operator profitability through higher occupancies and a larger customer base.
- Larger rooms
One of the ways to cater for longer stays and less transient residents, such as the older market, is by increasing room size. Larger units lead to higher occupancy rates and renewals, so expect new coliving developments to put forward plans for larger units (ranging from 20–25 square metres) and move their advertising to long-stay-specific channels.
- Greener coliving
With 2022 showcasing Western energy reliance on fossil fuels, the move to sustainable ways of living will pick up the pace. This not only means more innovation in design and smart buildings, but also the acceleration of green tech initiatives. Coliving developers will consider renovating existing properties instead of building anew, and operators that install smart energy technology to track individual usage and set up initiatives for residents (i.e. rent discounts for the most energy efficient) will have an edge over competitors.
- Tech-led amenities
As coliving grows, so does the competition. In the past, coliving operators could stand out by showcasing the range of amenities on offer, but in a more crowded market, it’s now about how well you run these amenities. For example, many coliving developments have gyms and wellbeing spaces, but how many let you book yoga classes via an app? Cinema rooms are popular in coliving buildings, but how many let residents set up their own film nights, send out invites and host digital discussions without input from the operator? Technology will be the key differentiator.
Operators that manage multiple coliving locations allow residents to move seamlessly between their spaces, from city to city, country to country. By offering easy booking and switching between locations, the branded coliving membership model will cater for the nomad lifestyle, so that residents can travel with their new friends and neighbours. Like paying a monthly Spotify subscription, memberships guarantee revenue for operators and work out cheaper for residents, so it’s no wonder companies like Gravity and HiveGeist coliving are already adopting the membership model.
- Coliving PMS developments
Coliving is synonymous with technology. From streamlining operations to enhancing resident experience, technology that’s developed specifically for the coliving industry will underpin the trajectory of coliving best practice. In 2023, we expect to see more ‘smart’ coliving tech - i.e. smart locks, smart meters and smart amenities - to become increasingly common as well as a greater focus on customer service technology as coliving operators look for new ways to differentiate their offering.
The future of coliving is bright
Despite recent growth, coliving is still near the start of its journey and has a bright future ahead.
To find out how to create the perfect coliving resident journey, join Alex Gooch, Head of Build to Rent at Inventory Hive, Rob Birch, Head of Operations at Gravity Co-living, and Giles Horwitch-Smith, CEO at res:harmonics, as they have an open discussion about how to create the perfect resident journey on Thursday 27th April at 12:30pm.
Sign up for the webinar here.