co-living combines many living/housing elements from several existing property types
nov 17, 2020
shanghai , november 17, 2020——according to cushman & wakefield’s recent report，looking beyond covid-19: co-living housing – embracing quality, affordability and community-focused living in china, co-living housing is a contemporary take on the shared housing business model. it is a place where people can live, work and play together. a co-living facility is usually specially designed to create inspiring living spaces for residents to interact and share experiences. the facility is usually fully furnished and provides a plethora of convenient services for the residents. the greatest value-add co-living housing can offer residents is access to the facility’s community.
co-living combines many living/housing elements from several existing property types
over the past few years, the concept has gained traction and has been making waves in major metropolitan cities, such as beijing, shanghai, shenzhen and guangzhou. more and more working millennials in the country have been turning to co-living as they see it as an affordable solution that provides quality accommodation with a community feel, allows them to live in a commuter-friendly desirable location and live amongst like-minded working professionals.
today, housing affordability is certainly a key reason for young professionals in china to seriously consider co-living housing facilities. in the recent past in the country, especially during the pre-residential market cooling policy period, we have seen housing prices rise quite rapidly. today, the average homes in many of the larger cities in china, including beijing, shanghai, shenzhen and guangzhou, are now relatively expensive. therefore, renting an apartment for a period of time before purchasing is increasingly a preferred option for fresh graduates in china as they begin their careers in the country’s big cities.
when examining the current market in china, co-living housing operators now have an established presence in china’s first tier cities. taking the city of shanghai as a case example, we can see that today, the top 50 co-living housing operators have a presence throughout the city, with pudong, minhang and baoshan commanding the greatest amount of associated co-living housing stock.
during the height of the epidemic period, the co-living housing sector in china experienced business disruption during the early months of 2020. moreover, given the early lockdown restrictions and, thereafter, fewer people travelling around the country, pressure on co-living housing facility occupancy came into effect in late february and early march. once again, taking the shanghai market as an example, according to meadin academy, around 50% of co-living housing facilities in the city experienced occupancy drops during the first half of this year. however, going by the same basket of properties and the same time period, around 33.33% of facilities also enjoyed occupancy increases of between 5% and 10%.
when considering the impact on rental, given the impact of the covid-19 outbreak on co-living occupancy, rental rates have also been affected as operators lessened rates to entice new residents as well as retain existing residents. when looking at data from meadin academy on selected major cities in china, we can see that all selected cities experienced a dip beginning february/march with a pick-up in may as the outbreak was controlled and the economy opened up again.
co-living housing rental for selected cities in china (jan 2019-jun 2020)
shaun brodie, head of occupier research, greater china, cushman & wakefield, said:” moving forward, given the impact of the outbreak, we do expect some key changes to be implemented within the co-living housing sector in china and some of these changes include: selected immediate changes – a greater emphasis on co-living housing health and safety, and a co-living housing facility checklist to combat the spread of bacteria and viruses, some amendments – social distancing measures, operating policies and business policies. selected longer term changes include the implementation of smart technology in co-living housing facilities and upgrading – internal layout and design and enhanced resident services.”
many millennials living and working in large cities in china have been paying more attention to their living experience recently rather than directly owning real estate. what’s more, as mentioned before, housing prices in major cities in the country will continue to remain high compared to the wages of young professionals and it is these trends which will ensure co-living housing remains a popular accommodation choice for young professionals in china for the years to come.
in addition, with the rise of remote working recently, there is talk of whether a city’s central urban area is as relevant socially and economically as before the epidemic. having said this however, in china, since the lifting of the home confinement restriction during the earlier part of the year, most white-collar workers have returned to the office and have worked out of their respective offices for the majority of any given working week. therefore, in most chinese cities, the main central area will still be a cultural and social centre, and after the epidemic, life in a centrally located co-living housing facility, which embraces quality; affordability and community-focused living…will continue to be welcomed in china.
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about cushman & wakefield
cushman & wakefield (nyse: cwk) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. cushman & wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. across greater china, there are 22 offices servicing the local market. the company won four of the top awards in the euromoney survey 2017 and 2018 in the categories of overall, agency letting/sales, valuation and research in china. in 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. to learn more, visit www.cushmanwakefield.com or follow @cushwake on twitter.
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