In the Philippines, the co-living segment is another type of residential leasing market, as it expands the options of prospective tenants to live in the metro. Co-living developments serve as an alternative to the residential leasing market that addresses the growing demand for employee housing especially for urban young professionals.
JLL’s Co-Living in Costly Cities – Asia Pacific report shows that a modern and urban lifestyle enabled by co-living spaces is becoming an experience that a significant number of the millennial generation wants or needs. JLL underlines the 4Cs of co-living that prove to be appealing factors to users. These 4Cs are:
· Convenience – Co-living spaces provide short-term solutions to most of its occupants who belong to the working professional segment that requires home locations to be near their offices. Aside from that, co-living offers flexible and shorter lease terms and often monthly lease options. Co-living contracts generally cover all services and move-in requirements. The spaces are fully furnished, utilities are set-up, and cleaning and maintenance services taken care of.
· Cost – Co-living operators are using the space better and reducing underutilized space. Economies of scale for things like utilities, wi-fi, furniture and cleaning services are also creating cost efficiencies for all parties involved. While a co-living space may cost more than a room in a shared apartment at first glance, once all the additional costs like move-in and move-out, agent fees, utilities, maintenance and furniture depreciation are factored in, the pricing is relatively similar – with the added benefit on having flexible lease terms.
· Community – The biggest differentiator for co-living compared to traditional shared residences is the emphasis on community. With the smart blend of private and communal spaces, co-living makes it effortless to bond with like-minded people.
· Collaboration – Catering to a young, aspirational demographic, residents within co-living spaces enjoy the collaborative benefits that the community provides. Some co-living models cater entirely towards a certain profile or profession, with co-living operations that specifically house ‘digital nomads’, blockchain communities or tech start-ups.
The Philippine co-living market is evident through the presence of dormitels, a combination of a dorm and hotel services that young professionals consider due to affordability, location, convenience, and safety. Currently, the majority of dormitels are found in the fringe areas of Bonifacio Global City (BGC) and Makati CBD. These include iDorm; Bonifacio Point; MyTown New York and MyTown Auckland; and, the Flats Amorsolo.
The rise in the demand for co-living spaces has drawn interest from big developers with some already staging their entry into the market. In 2017, SM Investments Corp. bought 61.2% shares of Philippines’ Urban Living Solutions Inc,’s MyTown brand. Meanwhile, Ayala Land Incorporated, opened its first dormitel – The Flats Amorsolo in 2018, and opened its second co-living facility in BGC early this year through The Flats BGC 5th Avenue. Similarly, property investors are keen on putting their money on co-living spaces as it brings in stable recurring income, supported by lower land value for acquisition in the fringe areas, low construction cost, and low operational cost, among others.
JLL believes that co-living is a solution to address growing housing needs due to urbanisation and provides an additional option to the different living types within Metro Manila. Although development progress is yet to reach its full potential, co-living spaces provide the residential market necessary considerations for a better living experience – convenience, cost-efficiency; strong sense of community and collaboration.