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Millennial ‘co-living’ concept gains momentum in Gulf

Hive Coliv co-living Hive Coliv/Natelee Cocks
Communal living for millennials: one of the shared dining areas in the Hive Coliv co-living development in Dubai’s Jumeirah Village Circle
  • Shared amenities in purpose-built residences
  • Developer Hive Coliv plans new projects
  • Other investors eyeing GCC market

The appetite for “co-living”, a form of communal housing that offers private rooms and shared spaces, is on the rise in the GCC, and more investors are entering the sector. 

Co-living as a sub-segment of residential property has gained in popularity in markets such as the UK and the US, as developers seek to provide flexible, high-quality rental options for young professionals. 

But it has been slower to take off in the Gulf, where the real estate industry is less mature. 

However, a young, growing population, rising rents and increased focus on communities is prompting interest in co-living and other rental models. 

“We are aware of a number of companies trying to bring this concept to the regional market,” said Taimur Khan, head of Middle East research at CBRE. 

These include the co-living specialist Hive Coliv, which completed its 120-unit Hive in Dubai’s Jumeirah Village Circle in 2022. It is now fully occupied.

Hive Coliv plans to build at least three more projects in the UAE and others in the GCC, its founder, Bass Ackermann, told AGBI.

Hive Coliv founder Bass Ackermann plans more projects in the GCCHive Coliv
Hive Coliv founder Bass Ackermann plans more projects in the GCC

Established local developers are also starting to offer co-living-style products, such as Emaar Properties’ Collective 2.0 in Dubai Hills, while global operators and institutional investors are circling the market, Khan said. 

“There’s a considerable amount of capital looking to access this kind of income by building an asset, leasing it, stabilising it or selling it on,” he said.

Co-living aims to create a community of individuals with common interests and ideologies. Hive Coliv targets those in their late 20s and early 30s working in the creative sectors, and has a stringent application process, Ackermann said.

Purpose-built developments typically offer compact private studios with a bedroom, bathroom and kitchenette, alongside shared amenities such as dining areas, workspaces and concierge services. Some even have restaurants, art galleries and coffee shops. 

Lease terms are more flexible than for other types of housing, units are furnished and rent and bills paid on an all-inclusive basis. In the UAE, paying a year’s rent upfront is standard, whereas co-living requires only monthly rents. 

It is a step beyond the traditional house share concept, in which a group of people occupy a home that was not necessarily designed for sharing. 

Khan said: “For a market that’s probably 70 percent renters, it’s always been a surprise that we haven’t seen more co-living and other multifamily rental and build-to-rent products in the UAE. 

“Lately, however, new products have come to market, and I expect the sector to grow. For tenants to have these amenities is a great way to start their journey in a country like the UAE, with its large expat population.”

Harshit Magon, director of alternative sectors at JLL Middle East and Africa, said the UAE’s “nascent co-living market is relatively fragmented and limited in scale. However, as the market expands and more operators enter this space, further consolidation and standardisation will occur. 

“Increased rental demand, greater regulatory transparency and understanding of co-living as a viable housing option will enhance investor confidence and attract a more diverse range of buyers and capital sources.”

Average rents in Dubai increased by almost 27 percent year on year in 2023, according to CBRE. On an all-cost basis, co-living is competitive with other rental products, but can be much pricier. 

Data from Reidin puts the average annual cost of a one-bedroom apartment in Jumeirah Village Circle at AED57,883 ($15,759), whereas a unit at Hive is 26 percent higher, at an average of AED73,105. Ackermann said co-living was “good value when you consider the quality and services provided”. 

Khan said: “The market for co-living in the region is possibly finite, because, culturally, a lot of people would struggle with the smaller unit sizes and want an entertainment space of their own. But there will certainly be growth.”

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