KUALA LUMPUR: Co-living is increasingly gaining popularity in Malaysia particularly in large, expensive cities and among the millennials who have grown up with technology, social media and the sharing economy.


Hom (pronounced as "home") is one of the latest real estate platforms offering co-living spaces in the country and its first unit is located at Sky Suites KLCC here.

Hom's vision is to reinvent the way people live, offering beautifully designed co-living spaces with an emphasis on community, togetherness and being a unit.

It provides flexible co-living for today's urban tribes, where everyone has access to premium services built into a fixed rate.

Chief executive officer Felix Ferdinand said Hom was born as a solution provider to cater to millennials' problem as the cost of housing continues to rise in major cities.

"We want to be that solution, and that is to champion the mission: to empower our community through accessibility over home ownership."

Ferdinand said more individuals were opting to rent rather than own a home.

For the younger generation and gig economy players, such as e-hailing drivers, social media influencers and content creators, housing loans may be difficult to obtain due to a low credit score.

"With the uncertainty of today's economic climate, renting without the burden of mortgage payments is seen as the most viable option," Felix said at a virtual press conference today.

Hom was launched today by Minister of Entrepreneur Development and Cooperatives (Medac) Datuk Seri Dr Wan Junaidi Tuanku Jaafar.

Wan Junaidi said entrepreneurs must be ready to adapt to the latest technology and innovation in their business considering the development of current economic trends.

"Medac is ready to provide support and facilitation to entrepreneurs in driving economic growth through technology-based enterprises."

"I am pleased to welcome Hom's efforts in offering a co-living space platform to the young people in the city, which will aid the recovery process of our economy in a post Covid-19 era," he added.

Ferdinand said Hom co-living was catered for anyone who are heavily affected by the exorbitant prices of home ownership as well as young professionals and digital nomads who need the flexibility of a living accommodation.

"Hom is defined by its community members, they also cater to travel junkies, thrill seekers and single individuals looking to be part of a fun-filled environment.

"In advocating for accessibility, we have our members' mobile app, a mobile application whereby you can make in-app payments, view tons of listings of accommodations where you want to stay, and of course on-demand services that we provide to you,' he added.

Hom plans to expand to other areas such as Bangsar South and Mont Kiara in the coming months.

He said it was also looking to expand to other countries in Southeast Asia.

"We look into a few key matrices, for example on how many buildings we are in, numbers of beds and how we track them (how many people that we served), so for the next 12 to 16 months we are looking for an expansion and of course we look into revenue as well.

"Currently, we are self funded but we had something in the pipeline. We have been talking to a few strategic partners and few investors already for this year," he added.

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CITY & COUNTRY
FROM THE EDGE
City & Country
Cover Story: The appeal of community living
E Jacqui Chan
/
The Edge Malaysia

July 22, 2020 16:00 pm +08
This article first appeared in City & Country, The Edge Malaysia Weekly, on July 13, 2020 - July 19, 2020.

Komune Living, which opened its doors late last year, has an average occupancy rate of over 70% (Photo by UOA Hospitality)

As the cost of housing continues to rise in all major cities around the world, millennials are finding it increasingly challenging to buy and even rent. According to a JLL report titled “Co-living in Costly Cities — Asia Pacific”, published in 2019, with more people delaying marriage and starting a family, the housing needs of those in the mid-20s to early 30s age bracket have shifted.

“This is reducing the requirement for traditional residential space and increasing the demand for flexible lifestyle-based housing. This trend is supporting the development of co-living in all markets, even those like India where people marry young (relative to other markets),” says JLL.

Nawawi Tie Leung managing director Eddy Wong defines co-living as a concept in which people, mostly young professionals, live in rental accommodation with communal areas and a strong community living spirit.

“It is a community-centric shared housing, much like a grown-up version of student hostels. This concept appeals to millennials but is expected to evolve to appeal to a broader spectrum of tenants as it gains acceptance,” says Eddy.

Savills Malaysia managing director and head Datuk Paul Khong does not see co-living as a novel concept in Malaysia.

“Co-living is an upgraded label for room rental with a more attractive and upmarket lifestyle theme as well as more shared space. Generally, it is targeted at students, working adults and couples and caters for the lifestyle of the driven and innovative generation of millennials and Gen Z,” he says.



A cheaper alternative and changing lifestyle

Khong believes co-living is gaining traction as it is a cheaper alternative to renting an entire apartment or house, which requires hefty deposits.

“Renting an entire apartment will cost at least 2+1 months of cash deposit payable upfront compared with renting a co-living space, where no large upfront deposit is required,” he says.


Eddy concurs, noting that the lack of housing affordability will also drive demand for co-living.

JLL compared the cost of renting a co-living room in Singapore with renting a room in the same apartment under a traditional one- to two-year lease. At first glance, the headline rent for the co-living room was 27% more than under the traditional rent model.

“However, after accounting for all expenses incurred by a tenant throughout a lease and considering things like the amortised lost value of furniture, exit cleaning costs and general maintenance, the real cost premium of living in a co-living (like-for-like) unit is around 5% in this scenario,” says JLL.

Without lease break costs or applicable agent fees, as well as the time saved on going through a traditional rental process, co-living can be cheaper than a traditional landlord-tenant model, notes JLL.

“Managing the process of moving in, moving out and the ongoing logistics of living under a tenant-landlord model that is intermediated by a property manager and an agent is highly inefficient and often frustrating. Dealing with a single company on all related issues, as well as peace of mind regarding relocation or moving out, creates huge upside for the tenant base,” says JLL.

According to Eddy, Cove co-living in Singapore advertises that its accommodation cost is lower than renting a studio apartment, owing to not having to furnish the unit or pay for utilities, housekeeping and WiFi, which are typically included in a co-living package.

“It is the housing version of a ‘plug-and-play’ concept, where you only need to move into the premises with your suitcase and everything else is already included in the package. There is also flexibility in terms of tenure as shorter tenancy periods are available for co-living. This would suit those who like to keep their options open while they contemplate and experience different lifestyle and living choices,” says Eddy.

Co-living also provides a community platform for more social interaction and convenience for the tenants.

“These collaborative spaces tend to promote better utilisation of personal assets while reducing inefficiencies wherever applicable. It may look to be more expensive than traditional leasing options but with co-living offering fitted and furnished options, it reduces additional costs and time spent in getting the space ready for use,” says Khong.


Eddy says while co-living started off as an affordable housing option, it has evolved into a lifestyle choice for those who enjoy being part of a larger community.

JLL notes that another factor is the changing lifestyle of the young, with millennials valuing experiences over ownership of things, and that service-based living is on the rise, from student housing to family rentals.

“Hotel operators and developers are picking up on this trend, and focusing more on ‘branded living’, as demand for the service-based aspect of residential takes priority. Even senior care homes are becoming more about the extras and lifestyle, contributing to an evolving set of living categories across the life spectrum,” says JLL.



Co-living in Malaysia

Co-living is still in its infancy in Malaysia but Eddy believes the concept will gain traction in tandem with the growing appeal of the sharing economy.

There are already a few co-living businesses in the local market. An early entrant was The Hatchery Place in USJ, Subang Jaya, founded by Elaine Wong and Kevin Yeoh in 2016 after the couple quit their corporate jobs the year before.

Finding working at home too distracting and not wanting to travel out of Subang Jaya, Elaine and Yeoh set up what they called a “creative house”, located just 15 minutes from their own home. Elaine took a room to use as her art studio, and Yeoh took another for his craft room, while the space downstairs was used for co-working.

“We converted the remaining two rooms into co-living rooms so we could have like-minded ­creative peers to not only work together but also share living spaces with us, as part of our intention to redesign our social circles,” says Elaine.

She believes that being intimately integrated in the community they have created makes The Hatchery Place different from the other operators in the market. The couple create activities for guests based on their own interests, including art and craft events, food and drink tasting, poetry nights, drum circles, and painting and woodworking workshops.

“Those who have stayed with us have become our lifelong friends, and the locals who co-worked with us have grown to become important allies in our creative endeavours. Many travellers return for month-long stays to focus on their projects,” says Elaine.

The Hatchery Place has housed more foreigners than locals, mainly digital nomads aged 23 to 45. The minimum stay is one week and rates start from RM385 a week.

“The average stay is three to four weeks. We have also had a number of 90-day stays and beyond,” says Elaine.

Operating on a larger scale is JL Coliving (JLCL), which was founded by Jessica Lee in 2018 and has two co-living premises in USJ 21 and The Mines in Seri Kembangan.

Lee came up with the idea for JLCL to address the issues of a lack of communication between housemates, safety and increasing isolation in modern society.

JLCL has 50 rooms in total with rates starting from RM650 a month. It offers a laundry room, meeting room, reading area, hot desks and a space for movies.

“The response has been good. We get a lot of positive feedback on our location and cleanliness. We have also received constructive feedback from our tenants such as having a kitchen. We currently provide only coffee, tea and snacks. Some of our tenants have also requested specific hotel essentials such as disposable dental care pack and shower cap, which we are looking to provide in the near future,” says Lee.


JLCL’s tenants are mostly between the ages of 17 and 30, and comprise mainly students and working adults.

“Sometimes we get digital nomads from other countries such as the UK, Russia, China and overseas tenants. Most are individual tenants as opposed to corporate tenants,” says Lee.

Property developers have also got in on the act. Tan & Tan Developments Bhd opened Co-Living @ Damai Residence in Ampang in January 2019 and UOA Group started Komune Living in Bangsar South in October 2019.

Damai Residence was initially designed as apartments to be sold but once the idea for co-living was conceived, the developer stopped selling the units. The fitting out of the interiors cost about RM4 million.

There are 174 private fully furnished rooms with single or double occupancy, and a choice of en-suite or shared bathrooms. Rent starts from RM1,000 a month, which includes all utilities, community events and use of all facilities.

Among the facilities are a shared kitchen and dining area, an entertainment zone, a gym and a communal lounge, while the co-working section offers a meeting room, a discussion area, an open office space and a printing and photocopy room.

According to Tan & Tan Developments CEO Tan Yee Seng, the concept has been very well accepted by both locals and foreigners.

“We have received a lot of positive feedback from our tenants. They especially emphasise that this healthy community formed within the building is just like their family. The advantage of staying in Co-Living @ Damai Residence is that we have an on-site community team to provide assistance to the tenants. The team will also organise events and activities such as movie nights, cultural food gatherings and outdoor activities,” says Tan.

The average tenancy period is six months and the tenants are mainly between the ages of 24 and 35.

“We have tenants as young as 18 all the way to 63 years old. They are mostly professionals, interns and work-from-home (WFH) individuals. Currently, locals make up 30% of the tenants and foreigners, 70%. Since the inception of our co-living project, we have received tenants from 34 nations,” says Tan.


Komune Living, which opened its doors late last year, is managed by UOA Hospitality, UOA Group’s hospitality arm. It has 648 units of private studios and apartment-style rooms, with rates starting from RM1,900 a month.

Komune Living general manager Mark Chen says it has an average occupancy rate of over 70%.

“Guests appreciate the all-in, hassle-free living solution that we offer. Our price is inclusive of utilities, WiFi, daily breakfast and housekeeping twice a week. Our tenancy contract is more flexible compared with others that require a minimum stay of six to 12 months. The short duration commitment greatly influences guests’ decision to stay with us.

“Our communal facilities, such as the community lounge and kitchen and the 24/7 game base, provide our guests with a space to hang out instead of staying in their rooms. This makes Komune Living feel more like home. The familiarity and interaction are pull factors for them,” says Chen.

The average length of short stay was 2.5 to three nights during the promotional period of October to December 2019, while the average length of long stay is three months to a year.

“Our current guests’ demographics range from 25 to 45 years old and comprise corporate clients, online business owners, postgraduates and undergraduates, freelancers and working IT professionals.

“Our business is 60% short term and 40% extended stay. From October to December 2019, locals comprised 80% of our guests and foreigners, 20%. Foreigners, mainly from the Philippines, Indonesia, South Korea and Japan, outnumber locals in terms of long-stay guests,” says Chen.

He adds that the co-living concept attracts more individual guests (about a quarter are corporate guests) and most learnt about Komune Living via its online brand awareness campaign.


What the future holds

The Hatchery Place’s Elaine believes the trend of co-living is catching on in Malaysia, which is a good thing.

“The Hatchery Place reflects us, so it has our personal touch. The more others start to create their own version of co-living, the more choices would be available to tailor to each person’s lifestyle needs. Co-living has become a movement to tackle the global issue of a growing sense of isolation and loneliness in our digitally connected world,” says Elaine.

JLCL’s Lee encountered scepticism from friends and others when explaining the concept of co-living.

“However, I certainly foresee more co-living spaces opening. There is a market for co-living; you just need to define your target market. That said, the cost of opening a co-living space will always be a factor. Expansion is the biggest challenge for me. This business needs a big investment to start. Nonetheless, I’m very positive and passionate about co-living,” she says.

Tan & Tan Developments’ Tan notes that flexibility, convenience and affordability are very important to people these days and there is opportunity for more co-living spaces as the trend of renting catches on.

Komune Living’s Chen says, “It’s a new way of living with a better quality of life, where the cost is reduced, allowing you a sense of ease.

“With the increasingly solitary lifestyle today, co-living’s appeal and acceptance will continue to grow and create new demand. This will lead to more co-living spaces opening in the future.”

Meanwhile, Nawawi Tie Leung’s Eddy feels that co-living can be a solution to the number of unsold properties in Malaysia as they can be repurposed into co-living spaces.

Savills Malaysia’s Khong says housing in Malaysia has yet to reach the extreme situation in major cities such as Hong Kong and Shanghai.

“Malaysia is still slightly behind in terms of actual co-living as it is still affordable to rent an apartment. Co-living spaces will flourish when living costs are high in KL and people find it hard to afford a sizeable place.

“However, there is still a niche demand for co-living. It attracts a certain category of people who are looking for a slightly luxurious fitted-out space to stay. It offers pure convenience, hassle-free, low-cost entry in terms of deposit and also a taste of communal living.”


Co-living in the Covid-19 era

The Covid-19 pandemic has impacted economies worldwide and the co-living market segment has not been spared.

“The co-living sector operates in the hospitality space. The pandemic has meant upgraded levels of hygiene across the board — which is a good thing. Operators will therefore have to focus on cleanliness and hygiene in shared spaces and common areas,” says Khong.

Tan says Co-Living @ Damai Residence’s occupancy rate has dropped since the implementation of the Movement Control Order (MCO), mainly because some of its foreign tenants were recalled to their home countries.

“We started to gear up our marketing activities when the Conditional MCO was implemented. Currently, we are focusing mainly on digital marketing. Other marketing plans in the pipeline include event collaboration with different partners once the situation improves and holding events is permitted,” says Tan.


As for The Hatchery Place, Elaine says it has stopped taking bookings as it is now focused on serving the remaining co-living residents, who are staying put in the country because of closed borders.

She believes people need connection and interaction and it is possible that the restriction in movement may result in a desire to connect even more after the crisis.

“We are taking the current downtime to look into how to be more innovative, sustainable and responsible and create more opportunities when this ends. We are constantly reaching out to other co-living operators around the world to stay up to date with current trends, challenges and solutions,” says Elaine.

Nawawi Tie Leung’s Eddy believes the pandemic has not changed the factors that drive co-living demand such as shared accommodation and cost, community-centric living and lease flexibility.

“People still need a place to stay and we are basically social creatures, so the desire to be part of a community remains intact, albeit the interactions may change with perhaps some social distancing and health safety protocols in place. In fact, the lease flexibility part will be a big plus in this uncertain economic climate.

“Having experienced the WFH option, people are likely to want to spend more time working from their co-living home if they have good and reliable internet connection. In this regard, the co-living model will likely shift to incorporate workspaces in the common areas of the development or work desks within the units to cater for residents who desire to WFH, which will ultimately add to the appeal of co-living spaces,” he says.

He suggests that operators of co-living space offer greater flexibility in the contract to make it more accessible and affordable to those who may be impacted by the pandemic and economic downturn.

JLCL’s Lee says business has not been greatly affected by the pandemic. “In fact, our occupancy is much higher now than before the MCO. We will make sure that our tenants are tested and cleared before they move in. We put a lot of emphasis on [observing] the standard operating procedures [in using] the common facilities.”

Home
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CITY & COUNTRY
FROM THE EDGE
City & Country
Cover Story: An attractive alternative for underperforming properties
Chai Yee Hoong
/
The Edge Malaysia

July 14, 2020 16:00 pm +08
This article first appeared in City & Country, The Edge Malaysia Weekly, on July 6, 2020 - July 12, 2020.

Properties located in the old quarters of KL city with adequate connection to public transport offer adaptive reuse prospects (Photo by Mohd Shahrin Yahya/The Edge)


As new buildings start to crowd cities, properties that are less desirable tend to suffer from vacancies. To give these underutilised properties a new lease of life and purpose, owners have been observed to turn to adaptive reuse strategies.

According to CBRE | WTW group managing director Foo Gee Jen, cities abroad have seen far more advanced adaptive reuse projects whereas this strategy is still a relatively new concept in Malaysia, with most local projects being comparatively conventional.

“Commercial buildings converted into housing can be found predominantly in metropolitan cities such as New York, Washington, Singapore, Taipei and Melbourne, where land in the city centre is scarce, the urban population is expanding rapidly and affordability is an issue. Also, such [projects] are commonly undertaken by co-living operators,” Foo says.

“Locally, although adaptive reuse is not yet a popular strategy, there has been a reasonable amount of such an undertaking.”

He cites examples of such projects abroad, such as Dux House in Melbourne, previously a cinema, church and office space before it was converted into an apartment, and a hospital in Arkansas that was converted into housing for the homeless.

In comparison, the majority of adaptive reuse projects locally were essentially switching office and retail spaces to other commercial uses such as hotel, healthcare, education, event as well as arts and culture spaces.

“While residential and affordable housing may not be the natural choices for [properties to be readapted into], we can expect this strategy to be deployed, in particular for underperforming properties amid the market and economic slowdown,” Foo says.

To readapt their properties, landlords can opt for a complete or partial readaptation, each with distinct objectives.

“To remain competitive in the market and enhance the performance of the property in terms of occupancy and rent, a complete readaptation is usually undertaken for buildings that are [less desirable].

“Partial readaptation is commonly adopted to fill up the remaining space of a property — for instance, existing offices and retail malls bringing in co-working space operators,” he explains.

CCO & Associates director Chan Wai Seen says it also depends on whether the building structure and layout are suitable for the specific uses. “I would love to see old and unutilised properties being readapted to optimise their potential,” he remarks.


Chan notes that this strategy, although generally low in adoption locally, should be encouraged, as the property market is constantly evolving in terms of demand and preferences.

“In the medium to long term, [adaptive reuse] is expected to become more relevant in view of the mismatched demand as well as unsuitable property types and conditions in relation to prevailing market trends,” he notes.

Examples of adaptive reuse projects in Malaysia include the Holiday Inn Express Kuala Lumpur City Centre hotel, which was converted from the Menara ING office; the Stanton Hotel Kota Kinabalu, previously known as Wisma AIA; The Chow Kit, an Ormond Hotel that was previously the Tune Hotel Chow Kit; REXKL, previously Rex Cinema; Wolo hotel in Bukit Bintang, previously Wisma KLIH; and The Majestic Malacca, a luxury boutique hotel that was originally a private mansion built in 1929.

More adaptive reuse projects can be found in Melaka and Georgetown heritage zones. “There are also old factories in Petaling Jaya that have been converted into offices and show units,” says Chan.



Barriers and perception

There are a few reasons adaptive reuse is less common in Malaysia. According to Foo, not all landlords are receptive to the idea because of perceived technical complexities and lower returns, especially when converting from commercial use to a purely residential one, which may not fulfil the real estate principle of highest and best use.

“Conversion to housing use can, however, still be done where the value for residential use outstrips its low commercial value, owing to oversupply and high vacancy rate.

“Also, when the property value is too high to be saleable or if redevelopment is too costly, the economics of readaptation would be justifiable,” he says.

Nonetheless, Foo adds that it takes time to overcome some of the barriers before readaptation can be more widely adopted in the local market.

“On the one hand, landlords will need to be educated about the implications of readaptation. Financial planning and development feasibility will also have to be considered.

“On the other hand, regulatory provisions will need to be coherent, since we have a zoning system and building compliance for different uses. In addition, having a supportive ecosystem with expertise available from architects, engineers and interior designers, among others, will enhance the feasibility of readaptation.”

Similarly, for adaptive reuse to work, Chan notes that both owners and prospective tenants need to be more receptive to the strategy.

“It is important for owners to undertake market and feasibility studies to determine their [adaptive reuse] strategies to ensure that they are in line with market demand and trend. Owners need to know the strategies before starting work.

“It would also depend on local authorities’ rules and regulations. Changes to a property would need approval from relevant authorities. If the changes are good for the market and community, the authorities would usually approve,” he says.


Proactive strategy

Landlords can consider adaptive reuse strategies for their properties so that they remain competitive in the property market.

Rather than leave underperforming properties unoccupied, adaptive reuse can optimise the property’s space usage instead, says Chan. “[Using the] right readaptive strategies, the value of properties can be enhanced. Building owners can also choose to readapt their property to gain investment returns while waiting for the right time to redevelop the property.

“Any decision to improve properties, including readapting them, is likely to depend on the projected returns.”

Rather than rely on a single stream of tenant profile and rents, landlords that can readapt and diversify space usage can mitigate risks and improve revenue flow for their properties, says Foo.

“For instance, existing offices and retail malls are bringing in co-working space operators. In the residential sector, concepts such as serviced apartments, SoHos/SoVos/SoFos, mixed developments, co-living spaces and Airbnb were introduced not that long ago. These concepts have revamped the conventional residential and commercial property play and opened up new perspectives and ideals. Therefore, readaptation could also be a proactive strategy in recognising the changing trend.”

Shifting from a business perspective to a city life point of view, Foo says adaptive reuse strategies are a manifestation of urbanisation as well as of man-made activities such as city rejuvenation and heritage conservation.

“As more white-collar workers enter the workforce, there will also be an increasing number of the populace [that will want to work and live in the city] and are even willing to accept micro-living as a trade-off.

“This underlines the recent emergence of new working and living concepts like co-working and co-living. Property owners will need to stay dynamic and be open to readaptation to keep up with the market.

“Thus, readaptation will persist and more innovative uses of space will emerge over time,” he says.

Apart from adaptive reuse, Chan says redevelopment is another alternative that will be increasingly available in the long term. “If the owners are happy with the returns from readapted properties, they may continue doing so. [But I believe] redevelopment will create even higher investment returns.”


A new lease of life

According to Chan, properties that are good prospects for adaptive reuse would be industrial factories and commercial buildings, including purpose-built offices, in good locations such as Kuala Lumpur city centre and Petaling Jaya, or popular commercial areas.

To Foo, examples of properties with adaptive reuse potential are those located in the old quarters of KL city with adequate connection to public transport and commercial prospects, such as Masjid Jamek, Pudu, Kampung Attap and Kampung Baru.

In terms of uses, hotels, boutique hotels, Airbnb units and co-living spaces have been a popular choice for adaptive reuse projects in general in Malaysia. In view of the ongoing Covid-19 pandemic, however, the hospitality route may not be the best strategy at the moment, notes Foo.

Instead, he says, landlords can consider warehousing as an alternative use in the current situation. “It very much depends on demand. If more last-mile delivery centres are required, then properties can be readapted into warehousing uses without requiring a large capital. Warehousing is also one of the only possible bright subsectors [for now].”

Chan notes that the current economic uncertainties will affect demand for properties, especially commercial spaces. “This may force some owners to readapt their properties to fill vacancies.”

Foo concurs. “With business affected by Covid-19, tenants are likely to downsize or even close down, which will translate into higher vacancy rates.”

At end-2019, occupancy rates of purpose-built offices and retail property in the Klang Valley surpassed the benchmark of 80%, Foo notes. The least occupied properties are generally found in less prime areas, he adds.

Jun 11, 2020,08:00am EDT

Can Co-Living Survive The Pandemic?

Paulo Bichucher
Forbes Councils Member
Forbes Real Estate Council
COUNCIL POST| Paid Program
Real Estate
POST WRITTEN BY

Paulo Bichucher

In the early weeks of COVID, there was extensive reporting on how the pandemic had accelerated the adoption of e-commerce and dealt a devastating blow to retail landlords. Now, at the lead of Twitter, Facebook and others, companies have accelerated shifts to remote work, with the potential to cause widespread disruption in the market for office space.


Given all the changes that the pandemic has caused us to consider, might it also affect where and how we choose to live? Will we experience a mass migration back to the suburbs and away from shared apartments?

Let’s take a step back and remember the trends that allowed for co-living to exist: the mass migration of young workers into urban hubs, the disparity between real estate prices and salaries, and the desire for flexibility and social interaction over stability and isolation. If I were to summarize, I would say it’s the growth of the cash-poor, experience-rich millennial generation.


Before going forward, I want to state that I am far from an expert on economics, sociology or urban planning. The predictions below represent my opinion on the information I have consumed throughout my career as a co-living space operator, my academic life and this current crisis.

Can we expect continued city migration?

In this environment, CEOs are reducing costs and saving up cash, and leases are certainly a target. The lockdown has reduced new demand for office space, and companies are using it as leverage while extending their work-from-home (WFH) policy until the end of this year or even into early 2021. If the current remote work experience turns out positive, executives will likely consider future growth without office expansions.

However, WFH isn’t a yes-or-no scenario when it comes to productivity, and only 12% of U.S. workers want to do it full time. The younger generation, and the professionals who aren’t measured by throughput, tend to do better with flex work arrangements. Flexible work will be widely adopted as a perk rather than companies completely giving up office space.

New offices will be designed to spark creativity and socialization, looking less like Foucault’s theory on disciplinary control. Teams will still get together frequently, and firms will keep choosing education- and innovation-driven urban hubs as their base. So I suspect new-grads will keep finding jobs they want in cities.

It’s unclear right now how many days at the workplace will be the “new normal.” Workers may take their two to four off days far from the city but still need a place in town in an effort to avoid lengthy commutes.

Will youngsters be able to afford mortgages or rent after COVID?

It’s no surprise that homeownership isn’t one of the top priorities among young professionals. The reasons are usually delay of marriage, the convenience of renting or the inexistence of savings for a down payment – hard trends to bet against.

While a recession makes it even more difficult to project a deterioration of these motives, we are at a “circuit breaker” market because no one can relocate right now. We’ve experienced a radical imbalance between supply and demand in home sales, and while the current scenario is fluid, as social distancing ripple effects continue, it can lead companies into bankruptcy and further unemployment. Demand for housing would then plunge along with rents.

Do suburbs provide the social experience young people want?

The percentage of 25- to 34-year-olds who live with roommates increased from 4% in 1990 to 7.5% in 2016. Millennials are going through a “suspended adulthood” phase, delaying the moment when they start feeling that they should settle down like “real” adults.

This delay comes with the need for financial flexibility and on-demand services. No wonder younger generations are the early adopters of sharing economy ventures, from Uber to Airbnb and WeWork.

Millennials also look for other ways to fulfill their social needs. Social encounters are highly regarded and are much more frequent if barriers of distance and time are reduced, a major benefit of urban hubs.


What’s the future of co-living?

Unemployment will be harmful to every market, and it’s unclear how long a recovery will take. Yet, new jobs will continue to be created in innovation and education hubs, and more flexible hours will ensue as the new normal.

I forecast that housing as a service will have more and more appeal because these living arrangements reduce friction from moving, offer contract flexibility and allow tenants’ income to be spent on experiences rather than rent. It is a living product that can adapt to more flexible times.

The current scenario puts pressure on urban and home infrastructure, though. Co-living spaces need to step up their facilities to endure our new reality. Health safety protocols, restrictions on the number of roommates and spacious common areas become nonnegotiable, just like reliable internet, location and affordability already were.


Community professionals should also think about how they can create value and how to build a sense of belonging and trust among members, away from their go-to happy hour. Promoting empathy and positivity is key. An example is building relationships between members and local commerce: providing access to services that can be a lifeline while also helping businesses survive. Another example is promoting new connections between users, perhaps by asking them to share playlists, recipes, etc. and then matching them based on their tastes.

Co-living can indeed survive and adapt after the pandemic and continue to offer the lifestyle, structure and philosophy millennials are in search of. Times of hardship are known to foster creativity and to boost value-driven products. In the post-COVID world, a convenient community to live and meet like-minded people in could prove to be good deal.

Hmlet to expand into Malaysia and Thailand, widens product offering
OLIVIA POH
SEP 15, 2020 04:00 AM
CO-LIVING platform Hmlet is expanding its territory in the South-east Asian residential real estate sector.

Chief executive and co-founder Yoan Kamalski told The Business Times that the Singapore-based startup has clinched management contracts from developers in Malaysia and Thailand to gain ground, while widening its product offerings to include services such as property management, interior design and furniture subscription.

Hmlet has now on-boarded more than 1,000 apartments up on its platform in Malaysia, and over 2,500 in Thailand, said Mr Kamalski, adding that developers were keen to engage Hmlet's platform to provide potential homeowners an all-digital way to view apartments, as well as to outsource management for certain units.

The operator also manages over 1,000 listings in Singapore, and is "on track to manage over 5,000 rooms by end of the year".

"With Covid-19, many big developers were coming to Hmlet with a good amount of quality stock on hand, to explore partnerships and business opportunities… It is now up to us to help developers get both expatriates and locals into these buildings," said Mr Kamalski.

More locals are warming up to the idea of co-living, he added. Before the global pandemic, up to 90 per cent of its member mix was dominated by expats.

Currently, locals living in its apartments in Singapore has risen to about a quarter, even as occupancy rate remains relatively constant, the CEO said.

Other communities in Tokyo and Hong Kong register an even higher mix of locals, with 45 per cent and 30 per cent respectively, he added.

"We hope to fill the gap in the market by offering more medium- to long-term housing for people, to better match the evolving needs of younger generations," said Mr Kamalski.

He said that locals are more sensitive to factors such as price and location, so the operator tweaked its product offering to allow for decoupling of services such as laundry, weekly cleaning and other amenities.

It has also widened its product offering, in hopes of gaining a greater market share of the residential real estate market.

Landlords are now able to directly list their properties on Hmlet without the need of a property agent, and can choose from tiered interior design packages to renovate their homes. Additionally, they can also rent, swap or buy furniture through its subscription service. The platform had been in beta since June this year.

The new offerings are part of its pivot to an asset-light model, to move towards more management contracts and profit-sharing contracts instead of renting, renovating and operating properties, in order to improve profitability, said its CEO.

Mr Kamalski told BT that Hmlet has been "sustainable" in markets like Singapore, Hong Kong and Tokyo, as measured by a "healthy" amount of growth and a high occupancy rate - 80 to 90 per cent.

It is also expanding its team for the new property listing marketplace Hmlet Listed, to include senior vice-president Michael Hogg and general manager Anthony McDonald. Just a few months ago, the firm brought on Rajive Keshup as its chief financial officer, as well as chief technology officer Pramodh Rai.

The company in July last year raised US$40 million in its Series B funding round, bringing its post-money valuation to around US$154.4 million, venture investment database VentureCap Insights reported.

Mr Kamalski said: "Given the current market situation, expanding into multiple lifestyle solutions and services including property listings, furniture rental and apartment-design services are a natural progression that not only bridge a gap in the rental marketing services landscape, but also elevate our promise of hassle-free living."