Living, Differently

Living, Differently The Future of Co-Living in Australia 24 25 THE OPERATOR Rhys Williams Founder & Managing Director, UKO Q. How has your tenant profile evolved over the past 2–3 years? And what characteristics are driving demand for Co-Living over alternatives such as PBSA, Build to Rent and the wider rental market? A. Co-Living is becoming widely recognised as a genuine housing solution for singles and young professionals, with this understanding growing as more of our UKO Co-Living products have entered the Australian market and residents share their experiences. Referral programs exist amongst existing and prospective tenants. As the UKO brand becomes more established, more tenants are coming directly to us, with referrals being particularly popular among single renters seeking private yet community- oriented living. Brand plays a critical role in tenant decision-making, with established brands becoming the preferred choice in the market, similar to trends seen in student accommodation and hotels. There is a bigger difference between Co-Living and the private rental market and PBSA than there is with Build to Rent. There are a lot of synergies between Co-Living and Build to Rent, just that Co-Living is a studio focused product with an all-inclusive offering. Q. What leasing trends are you currently seeing across your portfolio? For example, are different locations attracting a different tenant profile and are there seasonal demand patterns? A. We have plans to nationalise the UKO Co-Living brand by 2027, enabling tenants to move between cities within the same UKO ecosystem, enhancing flexibility and appeal. Different leasing trends are observed across the platform, with key differences noted between inner-city and suburban locations. Inner-city Co-Living attracts more transient tenants, while suburban locations see longer tenures, with the average tenant age being 28 to 30 and a 50/50 female-to-male ratio. The size of the building influences the scale of social groups and events, with larger buildings supporting more diverse communal activities. Q. How do you position Co- Living rents relative to the private rental market and studio apartments in competing buildings (e.g. PBSA and Build to Rent)? A. We have a team of analysts at UKO who carry out in- depth market research to benchmark our rents. We look closely at demand drivers such as corporate activity, social infrastructure, education and transport, as well as the number of 20- to 39-year-olds living in the area and, of course, prevailing vacancy rates. We also keep an eye on PBSA and Build to Rent rents, but the most important thing is establishing a compelling value proposition against those alternatives, for example, a fully furnished studio with utilities included, priced competitively for the convenience and flexibility it offers. Because we’ve got a number of operational assets in somany different locations, we are able to compare and contrast our data to arrive on a value proposition, and a rent, that we’re very confident we can deliver on. Q. What are the biggest operational constraints to scaling Co-Living in Australia, and how do you see those changing over the next 3–5 years? A. Construction costs, planning challenges, and the need for both domestic and international capital to understand the Australian Co- Living model are some of the main barriers we are experiencing to scaling, with investor education being a key ongoing effort. We believe taking international, and domestic, capital groups through our UKO product help go a long way to build their confidence in the space. It demonstrates the different ways that it might work compared to in places like Japan or in the UK or in Europe. It is important to demonstrate market depth and stable cash flows to attract institutional capital, noting that as more large-scale developments are delivered, confidence and investment in the sector are expected to grow. Q. Looking ahead, where do you see the strongest growth opportunities for Co-Living, both in terms of geography and target tenant groups? A. I see strong growth potential in all major capitals outside of Sydney. Particularly in areas around Brisbane, Geelong, and the Gold Coast due to low vacancy rates and upcoming events like the Olympics. The target tenant base is also expanding beyond young professionals and digital nomads to include individuals who maintain a city studio for work while living with family outside the city, reflecting trends seen in the UK. Q. In your view, what needs to change for Co-Living to transition from an emerging asset class to a scaled, institutional sector in Australia? A. More data points demonstrating market depth and resilience are needed to attract institutional capital, with private developers and international investors already showing interest. There are groups out of Japan, Singapore and a lot of Asia who have already got strategies to enter the market, however private developers also have a role to play. Q. What makes a successful operator / developer partnership? A. The best relationships between the operator and the developer are those where the developer is open to learning about tenant needs and collaborating with operators early in the design process to ensure the asset meets customer requirements. It is important to invest in well-designed, durable furniture, fixtures, and equipment, as poor quality can negatively impact rental and occupancy outcomes. Co-Living is becoming widely recognised as a genuine housing solution for singles and young professionals