ASIAN MILLENNIALS ARE NOW SHARING MORE THAN WORK SPACES AND TRANSPORT
BY Chris Prasad
A recent report by international property consultant Jones Lang LaSalle (JLL), entitled “Bridging the Housing Gap”, reveals that Asian millennials are now beginning to adopt a more communal attitude towards living as a means to mitigate the cost – and that means they are sharing more than workspaces and transportation.
They are now turning to a new form of shared housing, which has found some traction in other parts of the world, one that involves cohabiting with individuals of common interest and lifestyles.
JLL’s research reveals that co-living is gaining traction in Asia, particularly in markets like Hong Kong and the greater China region, where housing affordability is an ever-growing concern.
While flat-sharing among young professionals and students is popular in many countries, what differentiates co-living spaces is that they are professionally managed rather than informally arranged.
Most operators highlight the community aspects of the service, which range from yoga classes, film screenings, meals and free drinks, through to networking events with guest speakers and workshops tailored to the specific interests of residents.
Head of research for JLL Hong Kong, Denis Ma, said for those locked out of the residential market, the emergence of the co-living model offers an affordable solution that satisfies basic living needs. More importantly, in the Asian context, it is an alternative to staying in the family home, sharing a rental unit, or living in a subdivided flat.
“In addition, the community elements touted by most co-living schemes have the potential to improve the overall well-being of residents,” he added.
Still very much a novel initiative in Hong Kong, there is now an increasing rise in owners and investors converting their residential or hotel/guesthouse en-bloc properties into co-living schemes since. In fact, the trend has been gradually increasing in pace since 2015.
These spaces are predominately located in traditional residential clusters such as Mong Kok, as well as neighborhoods close to higher education institutions, including Hung Hom, Tuen Mun and Sha Tin.
In mainland China, the concept of co-living started with YOU+ International Youth Community among other operators that emerged in 2012. By the end of 2016, there were nearly 90 operators across the country.
Vanke Port Apartment, one of the largest operators on the mainland, manages more than 60,000 units. Meanwhile, YOU+ operates 16 properties, Mofang has expanded to about 15,000 units, ZiRoom operates seven properties and Coming Space manages 10,000 units.
“The demand from millennials for co-living is huge in mainland China. In the past five years alone, there were 43 million new graduates,” explained Joe Zhou, who is Head of Research at JLL China.
“Given the high housing prices across the country’s tier 1 and 2 cities, it will take at least three to five years for them to start purchasing their own homes. This means that many of them will have to rent or look for short-term alternatives. Therefore, co-living is definitely an attractive option,” he added.
Inspired by the co-working phenomenon, some other operators in Asia have placed work and lifestyle together under one roof.
India, for instance, currently has four start-ups that focus on co-living in Gurgaon and two others based in Bengaluru.
In Singapore, Aurum Investments, a sister company of co-working space Collision8, has invested in a new co-living startup, Hmlet.
There is also a Beijing-based start-up, 5Lmeet, that extends beyond shared accommodation. It also offers occupants an open office as well as other amenities such as restaurants, a gym and event space.
Bolstered by the barriers to homeownership and a housing shortage, the co-living market is proving to be an attractive option to investors and owners of existing properties, particularly in the hospitality sector.
Smaller budget and boutique hotels are one of the first property types being converted into co-living spaces due to the similar unit sizes and mature operating teams. However, converting other properties to co-living has to go through a complicated legal and planning process, which increases the time and cost.
“Another consideration is durability and obsolescence. The modern fit-out and finishes provided in many new co-living houses are what makes them attractive to users. Whether these shared spaces can maintain their appeal after several years of general wear and tear will also depend on how much operators invest in upkeep and maintenance,” said Ma from JLL Hong Kong.