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Ivanhoé-Backed Co-Living Firm Moves Into London With Fresh Investment. Milan, D.C. Are Next

A co-living platform backed by one of the world’s largest real estate investors is opening its first building in London in June and is planning to build a portfolio of at least 500 beds in the UK capital, Bisnow can reveal. It is also closing deals in the U.S. and the rest of Europe.

Cohabs, a Belgian firm that counts Canadian pension fund Ivanhoé Cambridge among its investors, is opening a 12-bedroom co-living scheme in Shepherd’s Bush. It has a pipeline of 125 rooms in London across five schemes, including in West Hampstead, Elephant and Castle, and Tooting. 

Maples Teesdale's Sam Nichols, Utopi's Falk Bleyl, Ivanhoé Cambridge's Arnaud Malbos, Gravity's Susanna Rock and Precede Capital's David Jerrard

The details of the move into London were revealed by Ivanhoé head of European investment Arnaud Malbos last week at Bisnow’s UK Co-Living Summit, held at The Royal Horseguards Hotel & One Whitehall Place in London. 

In an interview after the event, Malbos told Bisnow that Cohabs is looking for more buildings in London, across Europe and in U.S. cities like New York and Washington, D.C.

He outlined why the investor is a believer in co-living. 

“In the cities where Cohabs is investing, depending on which city, there is 20 to 100 times more demand than supply,” Malbos said. “If you look at the economic growth and demographic growth of larger hubs in Europe and the U.S., it will be a long time before supply and demand are in balance.” 

Ivanhoé was one of a group of investors that backed startup Cohabs in November 2022, alongside Belgian investors AG Real Estate, Belfius Insurance and the real estate arm of the Belgian sovereign wealth fund.

The JV’s initial investment was €200M (£170M, $214M), but that has grown alongside the pipeline to €400M today and will be €600M by the end of 2024, Malbos said. 

When the JV bought into Cohabs, it had a portfolio of 1,300 rooms, 60 of which were operational. Now the portfolio is 2,700 rooms, 1,300 of which are operational. 

Cohabs buys existing houses of multiple occupation and converts them into modern co-living assets, with high-end kitchens, gyms and cinema rooms. Buying such assets and improving them is both environmentally sustainable and “a beautiful way to densify our cities, meaning offering additional housing solutions to young professionals,” Malbos said. 

It typically buys assets that can be converted into 12 to 30 rooms — any more than that and it is hard to foster a sense of community in a scheme, Malbos said, which is one of the key appeals of co-living. 

That translates to a lot size of about €2M to €6M, not including the capital needed to convert assets. There is not much competition for deals of that size, he said — the buildings are too big for individual families but smaller than institutional investors usually target. 

The typical tenants are young professionals who might have just left university and are looking for a similar social experience or might need to move from one city to another for work. About 10% of its tenants are repeat customers, Malbos said.

The JV also owns a stake in the Cohabs management company as well as the buildings, a structure that Malbos said created an alignment between investors and operator. It also means that investors can benefit from all elements of the business, not just rent and asset price growth. He said Cohabs’ startup mentality ensures it is always iterating its design and operations. 

The portfolio has grown from five to seven countries and from seven to nine cities. New this year will be London, Milan and Washington, D.C.

Malbos said Cohabs targets a minimum of 500 beds in every city it moves into, and in London, the demand for co-living is such that it could reach 2,000 beds.