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© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
24 September 2018
Understanding Gen Z: Co-living spaces as a solution to unsold units
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
What is Co-living?
• Shared housing designed to support a purpose-driven life
• Residents share living space and a set of interests and values
• A modern, urban lifestyle that values openness, sharing, and
collaboration
2
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Co-living is like grown up student accommodation
Student Dorms Co-living space
Image Credit: www.basecommons.com
3
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Growing demand for co-living in Asia
Photo Source: Eton Properties, lyf, Vanke
Eton Properties’ Mini Ocean Park Station is
the largest co-living project in Hong Kong lyf@SMU opened in Singapore in February
Chinese developer Vanke launched Port
Apartment, the first major co-living project
in Tianjin
• General shift toward the sharing economy
• Acceptance by millennials in Asia
• Ongoing urbanisation trend
• Rising accommodation costs
4
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
An extension of the co-working trend
5
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Baby boomers give way to the ‘millennial’ generation
CountryMedian age
(years)
Total population
(2027; million)
Philippines 23.4 119.3
Cambodia 24.9 18.4
India 27.6 1,490.6
Malaysia 28.2 35.1
Indonesia 29.9 289.4
Vietnam 30.1 103.3
China 37.1 1,416.4
Thailand 37.2 68.5
Hong Kong 44.0 7.9
6
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Acceptance by Millennials
• Millennials have different values and lifestyles
• May choose experiences over material possessions
• More open to the idea of social networking and the sharing
economy
7
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Crowded cities and a lot of people!People per sq. km
Hong KongKuala Lumpur Mumbai Singapore
London Shanghai Tokyo 14,5005,100
8,30029,6506,900
13,400
7,0008
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
02040
Australia Singapore Hong Kong
2007 2017 2027
0
200
400
600
800
1,000
1,200
Japan Indonesia India China
Urb
an
Po
pu
latio
n, m
ln
Urbanisation of Asia Pacific
9
From 2017 to 2027, China’s urban population could increase by 143 mil people
0
5
10
15
20
25
30
Singapore Hong Kong Australia Malaysia
Urb
an
Po
pu
latio
n, m
ln
Source: Oxford Economics
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Asian cities see growing wave of young workersEmployment cumulative aggregate growth rate (%), 2018 to 2021F
Delhi
2.8%
Jakarta
3.2%
KualaLumpur
2.1%Singapore
1.1%
Hong
Kong
0.1%
Bangkok
1.0%
Shanghai
0.8%
Beijing
1.4%
Seoul
0.0%
Tokyo
0.6%
Sydney
1.1%
Melbourne
1.6% Auckland
0.6%
Manila
3.7%
Perth
2.0%
10
Source: Oxford Economics
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Rising housing costs and tiny homes not just limited to Hong Kong
Source: The Economist, JLL estimates
11
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Lagging the trend; Singapore-based Hmlet has raised
US$1.5M to grow co-living spaces in Japan
Experimentation stage; an operator in Melbourne aims
to bring together young creatives in a co-living
experiment
Ascott, CapitaLand’s wholly owned serviced residence
arm, unveiled the lyf brand last year and partnered with
the Singapore Management University to field test co-
living concepts
Several operators convert apartments
and hotels into dormitory rooms
At least a dozen operators offers rooms
of between 15 to 60 sqm to young
people in 20 Chinese cities
China
Japan
Hong Kong
Singapore
Australia
3 startups focus on co-living
operating out of Gurgaon, and 2
based out of Bengaluru
Opportunities in co-living space
Source: JLL, 1Q18
India
12
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Proliferation of co-living operators
Source: Company websites
HONG KONG
NORTH ASIA
INDIA
SINGAPORE
CHINA
MALAYSIA
AUSTRALIA
13
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
China is a trailblazer in this space in Asia
Jinan
Zhengzhou
Changsha
Qingdao
Dalian
Nanjing
Suzhou
Wuhan
Tianjin
Shenyang
Chengdu
Chongqing
Hangzhou
Xi’an
Fuzhou
Harbin
Changchun
Shijiazhuang
Nanchang
Nanning
Kunming
Hohhot
Guiyang
Hefei
GANSU
GUIZHOU
YUNNAN
HEBEI
HENAN
SHANXI
ANHUI
HUNAN
SHAANXI
HUBEI
Shanghai
Shenzhen
HAINAN
SHANDONG
Taipei
Macau
Hong Kong
TIBET
XINJIANG
QINGHAI
NINGXIA
JILIN
HEILONGJIANG
LIAONING
HEBEI
JIANGSU
ZHEJIANG
FUJIANJIANGXI
GUANGDONGGUANGXI
SICHUAN
CHONGQING
INNER MONGOLIA
TAIWAN
Jiaxing
Tianjin
Xiamen
Urumqi
Taiyuan
Xuzhou
Haikou
Lanzhou
Zhuhai
Foshan
Luoyang
Hangzhou
Wuhan
Jilin
Chengdu
Xining
Yinchuan
Operator No. of locations
Mofang 150
Yu Jian 43
You+ 21 (16 planned)
Ziroom 8
Anxin 70
Nova 3
Wowqu 9
Pamfleet2 (under
construction)
5Lmeet 1
Qingke 5 cities
UOKO 4 cities
UR Work 24 cities
Changsha
Source: Company websites
14
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Design – Many co-living hubs
are furnished and have
communal facilities for residents
to connect and collaborate.
Location – Either in the city centre
with a ready catchment of business
travellers or close to university and
technology hubs.
Social aspects – Social
activities such as talks, music
and cooking sessions, or
workshops.
Co-living space providers differentiate by:
15
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
The case for co-living in Hong Kong
16
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Home ownership remains challenging for many
Source: JLL
17
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Similar problems in the private rental market
Source: Rating & Valuation Department
18
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Income growth is falling behind
Source: Rating & Valuation Department, Census & Statistics Department
19
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Public rental housing an option…for those that can wait
4.7 years
20
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Subdivided flats: the unattractive option
210,000
21
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Can co-living be an answer?
22
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Co-living with Hong Kong characteristics
Top left: Weave Co-Living | Bottom left: Campus HK | Right: SynBox
23
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The road ahead
Above: WeLive Crystal City, Arlington, VA
24
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Finding opportunities in a challenging market
Source: Rating & Valuation Department, JLL
25
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
The argument for investing in co-living
Source: JLL
26
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. 27
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Investment considerations
28
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Issues to keep an eye on
29
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
• Scale
• Local market norms
• Ease of building conversion
• Operational costs
• Regulatory issues
• Location / Accessibility
Can it be a solution to unsold units?
30
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.