A modern, urban type of accommodation featuring shared living spaces, co-living is popular in big, international, costly cities overseas. It is also famous among Generation Z and millennials who grew up with social media, technology and the sharing economy.
With Kuala Lumpur becoming more expensive, James Buckley, Executive Director for Capital Markets at Knight Frank Malaysia, explained that co-living addresses some of the concerns on living within the city centre where it offers an agile lifestyle of living without having to worry on a mortgage, reported the New Straits Times.
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“Many singles, students or young professional workers find conventional new apartments out of their reach because of high rents, deposits and furnishing costs and co-living can be a more attractive option,” he said.
“However, due to the Covid-19 pandemic and until a vaccine is developed, co-living occupancy rates will be impacted as social distancing is very difficult when you are sharing a home with others, some of whom may be strangers or transient renters.”
Nonetheless, Buckley expects the drop in occupancy to be short-lived, with the sector likely to receive growing interest after the Covid-19 crisis has subsided.
He also explained that co-living would not be competing with conventional hotels since guests at co-living apartments tend to stay for a longer period of time at between three and six months. The amenities and services offered at co-living accommodations are also very different from that provided at hotels.
“In Kuala Lumpur, the typical occupier is single and in their mid-twenties. Co-living is often very popular with single females who want a safe, clean, and professionally run living experience,” said Buckley.
“Walking distance from work or MRT/LRT stations is critical to the success and some developers have converted residential apartment blocks by chopping up apartments to increase the number of units by six times.”
And considering the oversupply of new office accommodation, Buckley believes that some well-located Grade B office buildings can be converted into co-living spaces.
“The challenge for investors, however, is that co-living is most in-demand in central locations which are typically more expensive, but we do see some opportunities emerging, particularly in Kuala Lumpur Old City Centre,” he said.
With the Covid-19 pandemic, developers who are exploring or intending to develop co-living may revisit the functionality of the design and layout of their co-living spaces, especially the shared facilities and communal areas, said Knight Frank Malaysia Research and Consultancy Executive Director Judy Ong.
“With right timing post-Covid-19, co-living presents an opportunity for key players to secure a first-mover advantage in this largely untapped market,” she added.