Co-living can be a sustainable housing solution for expensive and crowded European cities, claims a new report from the Urban Land Institute (ULI) and JLL.
The co-living sector provides rental accommodation which is characterised by smaller private spaces and larger shared spaces. Thus renters might have a bedroom and bathroom to themselves but share a kitchen, living room and outdoor space with other tenants.
Co-living originated in the US, but has spread to other markets as an option for younger tenants looking for better amenities than a flat share and more social interaction than solo living.
ULI and JLL estimated total investment in the sector of around €1.2bn from 2020 to mid-2022, with further investor commitments for various operational platforms.
The report argues co-living can help cities struggling to provide appropriate, affordable housing for rapidly growing urban populations, increasingly made up of small and single households.
It also highlights potential ESG gains which can derive from shared amenities and public spaces and converting disused buildings and spaces. These include increased affordability, energy efficiency, social engagement and wellbeing.
ULI and JLL have produced a best-practice guide to support the sector’s growth, including recommendations for policy frameworks for developers, design and development of co-living schemes, operations and technology, and financial metrics to improve transparency.
The sector has typically been targeted at younger renters, however the report suggested it could also suit retired people who want to return to cities to access leisure opportunities and amenities.
ULI Europe CEO Lisette van Doorn said: “There is an ambitious ESG agenda linked to successful co-living projects, by focusing on repurposing of existing buildings and knitting the project neatly into the wider community, by connecting residents to local entrepreneurs or giving the wider community access to some of the amenities, like coworking and a gym. We have barely begun to scratch the surface in realising its true potential.”
CBRE Investment Management has teamed up with Dutch pensions and financial services company NN Group to invest in sustainable and affordable housing in the Netherlands.
The Positive Impact Programmatic Venture (PIPV) has an initial equity commitment of €500 million. The venture will invest in Dutch sustainable and affordable residential real estate with the aim to improve energy efficiency and reduce carbon emissions.
The venture’s ambition is to achieve alignment with the environmental objectives of the EU Taxonomy for all investment properties, while also focusing on providing mid-priced rental for households who do not qualify for social housing. It aims to reduce “landlord-controlled” greenhouse gas emissions by 80% and to procure 100% renewable electricity by 2030. The portfolio will be net-zero operational emissions by 2035.
PIPV will also promote water conservation, biodiversity protection, pollution prevention and the circular economy in its portfolio and will also seek to reduce the embodied carbon of new developments.
Jelle van der Giessen, chief investment officer of NN Group, said: “Contributing to the well-being of people and planet is a key element of our strategy. NN has set clear targets towards net-zero emissions and we have pledged to more than double our investments in renewable infrastructure investments, green bonds and energy efficient real estate in the coming years. The PIPV project is clearly contributing to that target.”
PIPV’s first acquisition is the forward funding of Lighthouse (pictured), a 333 unit residential asset in Eindhoven, which is being developed by Rockfield Real Estate.