By Poovenraj Kanagaraj
Knight Frank’s Commercial Real Estate Investment Sentiment Survey 2020 report reveals that 58 percent of the respondents to survey are exploring or planning to develop co-living or student accomodation.
According to Knight Frank Malaysia, as Kuala Lumpur has grown to be more expensive, co-living addresses some of the issues around living in the centre of the city as it also offers an agile lifestyle living with no worry about a mortgage.
“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,” said James Buckley, executive director of Capital Markets, Knight Frank Malaysia.
“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 complete strangers or transient renters. This drop in occupancy is likely to be short lived and once the Covid-19 crisis subsides, we believe there will be growing interest in this sector,” he added.
He also opines that co-living does not compete with conventional hotels as guests staying at co-living apartments for a longer period of between three and six months and the types of services and amenities offered are quite different to what a hotel provides.
The form of accommodation, according to Knight Frank Malaysia has also proven to be popular with single females who look for a safe living experience.
“Given the oversupply of new office accommodation, some well-located grade B office buildings can also be repositioned 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,” said Buckley.
Judy Ong, executive director of Research and Consultancy, Knight Frank Malaysia highlighted that the requirement for human interaction remains deeply rooted although the new normal beyond the Covid-19 crisis is hard to predict.
This pandemic may see developers who are exploring or planning to develop co-living accommodation to revisit the functionality of their co-living space in terms of the design and layout, in particular communal areas and shared facilities.” Ong commented.
Ong concluded, “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.”