Highlights from Portugese coliving meetup
Given the profound and dynamic nature of this global pandemic, Co-liv and B-Hive Living have been convening a series of roundtables to explore the impact of Covid-19 on the coliving sector. The aim is to help coliving and other build-to-rent strategies to pivot towards a sustainable future. We concluded with the top 10 coliving predictions for 2021.
In January we hosted the first event of 2021 “Portugal Coliving Outlook 2021: Accelerating out of the crisis”.
Some great speakers including Matt Lesniak (Co-founder and Head of Impact & Innovation, Coliving Insights Magazine & Conscious Coliving), Dave Williams (Chairman, CEO and Co-Founder, NOMADX), Nuno Nunes (Head of Capital Markets, CBRE Portugal) shared their insights on their coliving predictions for 2021.
Our top 10 coliving predictions for 2021
This pandemic will continue to trigger a host of new requirements from operators and tenants. With that, a greater emphasis on safety, wellbeing and convenience will become the norm in 2021. As remote working becomes widespread, new coliving spaces will be seeking to provide larger private spaces. They will include communal areas designed to cater for both live and work needs in equal measure and diverse levels of intimacy. Further investment and training in community facilitation will be needed. Mental health support and prevention will become an essential skill in the coliving professional toolkit.
The long spell of remote working continues. The perceived need for presence and proximity in the workplace is dissolving. It will create a new wave of remote workers, freelancers and digital nomads towards the Portuguese shores once travel restrictions ease. This will shift the demand and supply for coliving spaces towards the outskirts of Lisbon and Porto to more residential neighbourhoods. It’s because this new audience look for a more authentic Portuguese experience away from the traditional touristic areas. The search for new retreat/work destinations is on the rise with locations such as Ericeira and Madeira Island likely to become a hot spot for foreign workers.
Despite the mammoth influx of Airb&b properties in the traditional rental market in Porto and Lisbon in 2020, rental values are expected to remain stable in 2021. They may even grow for premium coliving properties offering the right combination of comfort, services and amenities for the professional market. Highly desirable amenities include flexible contracts, no deposits, plenty of natural light, comfy chairs, large desks and of course high-speed internet.
Institutional investment into coliving is set to grow in Portugal after the show of strength and resilience demonstrated by coliving assets during the pandemic. According to CBRE, this growth will be marked by over 3000 purpose-built units which are expected to enter the market in the next eighteen months. The strong pipeline is the result of a growing trend of collaboration between Portuguese investors and developers and international operators.
The renewed confidence in coliving together with the recent demise of Quarters coliving in the US will lead to management contracts replacing lease contracts as the prevalent contractual form for large-scale coliving. One of lessons learned in this pandemic is that having lease contract is no guarantee of income for investors in tough market conditions. Those lead to costly and time-consuming contractual renegotiations and hence the recognition of the management model as a better way to align the interests of both investors and operators in Portugal and elsewhere.
The old stock of large apartments in Lisbon will represent a substantial opportunity for coliving companies in 2021. The inflated prices of the capital have so far been a major huddle for the proliferation of purpose-built coliving spaces. Retrofit of those properties could become a way forward to unlock the power of coliving in Lisbon.
As banks and other more traditional forms of financing tighten, crowdfunding is set to become more prevalent in the financing of coliving projects which enjoy a growing popularity among consumers in general. This is already happening with success in the UK and Brazil. 2021 could be the year that crowdfunding for real estate investment takes off in Portugal.
The real estate industry is the next in line to get its piece of the subscription economy cake. Economical and societal changes created an ideal condition for the new concept of subscription living to thrive. Living subscription models offer flexibility and convenience to consumers and a unique business opportunity to investors and shared living operators. They present themselves as a win-win model to please all stakeholders. Subscription living can establish a new paradigm for how people live, work, travel and connect. Businesses and investors in real estate need to prepare to take advantage of the subscription economy. Otherwise they will have to witness the competition creatively fulfill the market’s needs.
With stress, anxiety and burnout on the rise, the homebuilding community will have the massive opportunity to shift approach to sustainability. The industry will need to go beyond the focus on the 1% equation associated with the costs of energy, water and waste. It will truly embrace the transformative potential of healthy buildings able to support the health and wellbeing of current and future generations. Environment certification and building design certification will become a must in the near future.
Integrating different types of impact KPI will be paramount. These should measure not only the strength of the community and neighbourhood engagement, but also residents and staff wellbeing, building sustainability, energy/waste management, economic impact and more.
Listen to the event podcast on the COLIV Spotify channel at the following link.