The major players say that investments in this segment are growing and it is undergoing a boom, although faced with serious challenges such as the need to develop regulations.
The ”Living” sector, which combines five sub-sectors: student residence, shared hosting, multi-family real estate, affordable housing and healthcare assets is a developing market in Spain, but gradually getting a boost.
Leticia Pérez, managing director of Dazia Capital, explained during the "Living as a Service" online event hosted by Simplifika and Atlas RE that "this is a formula that accelerated during the pandemic" and that "it is not difficult for investors to invest in "Coliving", because we are in a very favorable market environment."
However, all participants agree that while there are still many aspects to be determined in this segment, it is a booming market that will grow significantly in both volume and investment in the coming years.
According to a report by JLL, it is expected that investment in residential assets will increase in Europe, after reaching 83.4 billion euros during 2021. Thus, the percentage of investors who intend to increase their investments in this type of asset has increased from 41% to 59%.
Currently, the "Living" real estate sector is more consolidated in Europe than in Spain. One of the reasons it is slower to develop in Spain is "regulatory uncertainty in residential and living projects," says Sandra Daza, managing director of Gesvalt.
On the other hand, Christopher Hütwohl, managing director of Corestate Capital in Spain, emphasizes that another reason is that "in Spain, people are more prone to buy than to rent, so it takes longer for these models to take root here." However, he clarifies that this trend is gradually changing.
In the Spanish market, most of the projects are located in Madrid and Barcelona. However, this model is also suitable for cities such as Valencia, Seville, Zaragoza, Bilbao, Malaga, and others. In this regard, Hütwohl explains that "the demand is changing, and now more models like "Coliving" are needed to meet new needs."
Another topic for discussion was the main aspects of successful work. In this sense, Jeffrey Sújar, managing partner for alternative investments at Urbania International, says that "the key is in the balance of services and prices." So, he notes that "an expensive operation can make a project unviable" and that, in fact, one of the problems that "Coliving" faces today is the lack of projects that can share the costs.