A new survey shows that convenience, location and affordability are the main reasons current users choose co-living. The co-living sector in Singapore is expected to appeal to a broader user base over time – opening up new opportunities for real estate developers and investors.
While it is still in its early stages of development, the co-living sector in Singapore is expected to appeal to a broader user base over time – opening up new opportunities for real estate developers and investors, according to a JLL report.
A JLL survey showed that convenience, location and affordability were the main reasons current users choose co-living.
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Among non-users, about 10 percent of respondents indicated that they would consider co-living, of whom 64 percent were expatriates.
“With co-living currently making up less than one percent of Singapore’s private residential housing stock, our research demonstrates there is a largely untapped market for the segment amongst the 1.6 million foreign population,” said Tay Huey Ying, head of research at JLL Singapore.
“Success in the co-living sector will be built upon operators’ ability to change the way people live by plugging inefficiencies in traditional housing models. However, one hurdle for co-living operators to overcome is the deeply entrenched home-ownership culture amongst Singaporeans.”
Despite this, the Singapore co-living market has benefited from accelerated investment during the past year, on the back of the government’s move to reduce the minimum rental period for private homes from six to three months.
Singapore-based start-up Hmlet, for instance, recently received funding from Sequoia India and Aurum Investments.
Tay noted that the most common co-living business model in Singapore are “asset-light, leasing units of entire blocks from a landlord and then sub-leasing the retrofitted rooms to their tenants”.
“This allows them to scale up fast. However, a number of operators, such as lyf, are opting for a mix of an owner-operated and a management contract model where the operator signs a long term agreement with the developer or landlord.”
JTC awarded a site in one-north for a purpose-built co-living facility to Ascott Residence Trust, after it submitted a $62.4 million bid. The co-living facility will be called lyf one-north Singapore.
“Given the variety of potential models and concepts that operators could explore, we believe that over time, we’re likely to see co-living take a higher market share in Singapore as a broader tenant base continues to drive demand,” said Tay.
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Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email firstname.lastname@example.org