24 September 2018 - REHDA |...

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24 September 2018

Understanding Gen Z: Co-living spaces as a solution to unsold units


What is Co-living?

• Shared housing designed to support a purpose-driven life

• Residents share living space and a set of interests and values

• A modern, urban lifestyle that values openness, sharing, and

collaboration

2


Co-living is like grown up student accommodation

Student Dorms Co-living space

Image Credit: www.basecommons.com

3


Growing demand for co-living in Asia

Photo Source: Eton Properties, lyf, Vanke

Eton Properties’ Mini Ocean Park Station is

the largest co-living project in Hong Kong lyf@SMU opened in Singapore in February

Chinese developer Vanke launched Port

Apartment, the first major co-living project

in Tianjin

• General shift toward the sharing economy

• Acceptance by millennials in Asia

• Ongoing urbanisation trend

• Rising accommodation costs

4


An extension of the co-working trend

5


Baby boomers give way to the ‘millennial’ generation

CountryMedian age

(years)

Total population

(2027; million)

Philippines 23.4 119.3

Cambodia 24.9 18.4

India 27.6 1,490.6

Malaysia 28.2 35.1

Indonesia 29.9 289.4

Vietnam 30.1 103.3

China 37.1 1,416.4

Thailand 37.2 68.5

Hong Kong 44.0 7.9

6


Acceptance by Millennials

• Millennials have different values and lifestyles

• May choose experiences over material possessions

• More open to the idea of social networking and the sharing

economy

7

http://www.google.com.hk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwihrOrb19TbAhUJmZQKHRVSAOAQjRx6BAgBEAU&url=http://time.com/247/millennials-the-me-me-me-generation/&psig=AOvVaw1-Up0Sci5egaEbNR92QH5F&ust=1529118302486532


Crowded cities and a lot of people!People per sq. km

Hong KongKuala Lumpur Mumbai Singapore

London Shanghai Tokyo 14,5005,100

8,30029,6506,900

13,400

7,0008


02040

Australia Singapore Hong Kong

2007 2017 2027

0

200

400

600

800

1,000

1,200

Japan Indonesia India China

Urb

an

Po

pu

latio

n, m

ln

Urbanisation of Asia Pacific

9

From 2017 to 2027, China’s urban population could increase by 143 mil people

0

5

10

15

20

25

30

Singapore Hong Kong Australia Malaysia

Urb

an

Po

pu

latio

n, m

ln

Source: Oxford Economics


Asian cities see growing wave of young workersEmployment cumulative aggregate growth rate (%), 2018 to 2021F

Delhi

2.8%

Jakarta

3.2%

KualaLumpur

2.1%Singapore

1.1%

Hong

Kong

0.1%

Bangkok

1.0%

Shanghai

0.8%

Beijing

1.4%

Seoul

0.0%

Tokyo

0.6%

Sydney

1.1%

Melbourne

1.6% Auckland

0.6%

Manila

3.7%

Perth

2.0%

10

Source: Oxford Economics


Rising housing costs and tiny homes not just limited to Hong Kong

Source: The Economist, JLL estimates

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Lagging the trend; Singapore-based Hmlet has raised

US$1.5M to grow co-living spaces in Japan

Experimentation stage; an operator in Melbourne aims

to bring together young creatives in a co-living

experiment

Ascott, CapitaLand’s wholly owned serviced residence

arm, unveiled the lyf brand last year and partnered with

the Singapore Management University to field test co-

living concepts

Several operators convert apartments

and hotels into dormitory rooms

At least a dozen operators offers rooms

of between 15 to 60 sqm to young

people in 20 Chinese cities

China

Japan

Hong Kong

Singapore

Australia

3 startups focus on co-living

operating out of Gurgaon, and 2

based out of Bengaluru

Opportunities in co-living space

Source: JLL, 1Q18

India

12


Proliferation of co-living operators

Source: Company websites

HONG KONG

NORTH ASIA

INDIA

SINGAPORE

CHINA

MALAYSIA

AUSTRALIA

13


China is a trailblazer in this space in Asia

Jinan

Zhengzhou

Changsha

Qingdao

Dalian

Nanjing

Suzhou

Wuhan

Tianjin

Shenyang

Chengdu

Chongqing

Hangzhou

Xi’an

Fuzhou

Harbin

Changchun

Shijiazhuang

Nanchang

Nanning

Kunming

Hohhot

Guiyang

Hefei

GANSU

GUIZHOU

YUNNAN

HEBEI

HENAN

SHANXI

ANHUI

HUNAN

SHAANXI

HUBEI

Shanghai

Shenzhen

HAINAN

SHANDONG

Taipei

Macau

Hong Kong

TIBET

XINJIANG

QINGHAI

NINGXIA

JILIN

HEILONGJIANG

LIAONING

HEBEI

JIANGSU

ZHEJIANG

FUJIANJIANGXI

GUANGDONGGUANGXI

SICHUAN

CHONGQING

INNER MONGOLIA

TAIWAN

Jiaxing

Tianjin

Xiamen

Urumqi

Taiyuan

Xuzhou

Haikou

Lanzhou

Zhuhai

Foshan

Luoyang

Hangzhou

Wuhan

Jilin

Chengdu

Xining

Yinchuan

Operator No. of locations

Mofang 150

Yu Jian 43

You+ 21 (16 planned)

Ziroom 8

Anxin 70

Nova 3

Wowqu 9

Pamfleet2 (under

construction)

5Lmeet 1

Qingke 5 cities

UOKO 4 cities

UR Work 24 cities

Changsha

Source: Company websites

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Design – Many co-living hubs

are furnished and have

communal facilities for residents

to connect and collaborate.

Location – Either in the city centre

with a ready catchment of business

travellers or close to university and

technology hubs.

Social aspects – Social

activities such as talks, music

and cooking sessions, or

workshops.

Co-living space providers differentiate by:

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The case for co-living in Hong Kong

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Home ownership remains challenging for many

Source: JLL

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Similar problems in the private rental market

Source: Rating & Valuation Department

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Income growth is falling behind

Source: Rating & Valuation Department, Census & Statistics Department

19


Public rental housing an option…for those that can wait

4.7 years

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Subdivided flats: the unattractive option

210,000

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Can co-living be an answer?

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Co-living with Hong Kong characteristics

Top left: Weave Co-Living | Bottom left: Campus HK | Right: SynBox

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The road ahead

Above: WeLive Crystal City, Arlington, VA

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Finding opportunities in a challenging market

Source: Rating & Valuation Department, JLL

25


The argument for investing in co-living

Source: JLL

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Investment considerations

28


Issues to keep an eye on

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• Scale

• Local market norms

• Ease of building conversion

• Operational costs

• Regulatory issues

• Location / Accessibility

Can it be a solution to unsold units?

30

24 September 2018 - REHDA |...

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