Coliving Investors Looking To Increase Exposure To Asset Class, Investec Finds

Research from Investec Bank has found 40% of investors expect to increase their exposure to the coliving sector over the next year.

The lender’s latest coliving report says more than 9,000 coliving units are operational across the UK, with a growing pipeline and a steady rise in planning submissions pointing to increased confidence from developers and capital partners.

However, the report flags that planning inconsistency, use-class complexity and delivery capability are all likely to shape how quickly the sector can scale.

“Coliving has evolved materially in recent years and is now establishing itself as a credible, institutionally backed segment of the UK living market,” Investec Head of Corporate Real Estate Lending Jonathan Long said of the findings.

“The sector benefits from long-term structural drivers including housing undersupply, affordability pressures and sustained demand from renters seeking professionally managed, well-located accommodation with flexibility and a strong amenity offer,” he added.

Investec has lent more than £1B to the UK living sector to date, primarily for purpose-built student accommodation, and is expanding its footprint across single-family and multifamily asset classes. It has also become an active funding partner in coliving, backing operators including Scape, The James and True North.

“What is becoming increasingly clear is that the question is no longer whether coliving has a place in the market but how successfully it can be delivered at scale,” Long said.

“For investors and developers, execution is now the critical variable. That places real value on working with capital partners who understand the operational and planning complexities of the living sector and can provide funding solutions that support delivery through different market conditions.”

Investec says the next phase of the sector’s evolution will hinge on pricing transparency, operational excellence and the ability to sustain high occupancy through strong amenity and service offerings. While build-to-rent assets still typically command tighter yields, coliving is increasingly competing on income intensity, particularly in dense urban locations where higher unit counts can drive stronger returns per square foot.