The Rise of the Co-Living Industry
As the sharing economy takes over the real estate industry, communal living is in vogue again; presenting opportunities for individuals and smaller companies alike amidst the nascent co-living movement.
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The key facilitator for this rapid growth and transaction has been the wide adoption and ubiquity of online websites and transaction platforms.
"Digital platforms can help challenge the entire housing industry of today."
In the modern era, the relative ease of transactions has presented a thoroughly attractive proposition for millennials, who desire to experience the community spirit of living with other like-minded folks - a spirit lost in society’s transition to the digital milieu.
According to Euromonitor International, co-living’s placing as “A Top Consumer Trend for 2018”can also be largely attributed to its role as an “alternative accelerator” as start-ups and venture capital platforms dominate the world of business.
Cities with exorbitant real estate prices such as Hong Kong are also seeing a greater uptake of co-living shared spaces, with the promise of independence, “intellectual exchange”; and ultimately, a desire to break-free from the cramped shackles of multigenerational living.
Young and Old Alike
While shared housing has typically been the spotlight of a new millennial lifestyle, the ease of adopting and replicating this housing model also heralds a revolution of the senior housing industry. Despite the current young and trendy marketing messages crowding the co-living space, the Senior Living Innovation Forum reports of “Gen Xers and Baby Boomers (some in their 60s) … signing on for the co-living’s minimalist mode of life.”
Loneliness has made its mark as a public health epidemic. The effect on retirees and seniors in the society is exacerbated for they lack the social pillars the young can rely on at work and in school. In providing community-centric programmes and interaction, co-living signals immense, yet to be exploited potential as a programme to combat this global. public health hazard.
In light of the plethora of concerns spotlighting the millennials and the young-at-heart’s prioritisation of convenience and flexibility, shared living options ostensibly directly addresses these issues. And co-living, in its ability to deliver the instant gratification of community spirit with zero requirements of any long-term commitment, has been touted as “the perfect solution.”
And the benefits derived from the flexible arrangement facilitated by co-living extends beyond the guests. With communal living’s global appeal across various demographics, developers and property owners will have no trouble filling up their fully furnished spaces, with a purported “higher rental yield of 9-12%” as compared to the average of “1.5-3% on residential properties”.
The strong growth in the co-living space is further backed by large global players who are anticipating communal living to be the new norm for living. Ant Financial, an affiliate company under the Chinese Alibaba Group, had recently “led a $500m investment in Beijing-based co-living group Danke Apartments” in Danke Apartment’s third round of fundraising. This bumped the valuation of Danke, residential likeness of global coworking giant WeWork, up to an excess of $2 billion.
In fact, such great interest reflects the current market’s overall sentiment and hopefulness about the space. In February 2019, PropTiger, Softbank-backed realty portal, estimates the co-living market in India alone can “grow into a US$93 billion market”, following the acclaimed propagating success of global co-working spaces.
The market fanfare and positive sentiments around the co-living structure is bound to enable the expansion of co-living businesses worldwide. As societal shifts in this digital era pushes the industry’s transition into communal spaces, the fundamental expectations for hospitality standards remain unchanged.
And as these businesses scale, it necessitates the answer to the fundamental question of economics: “How do we allocate scarce resources (i.e. time and attention) to our ballooning customer base?”
With freshly injected funds, the challenge now lies in the need to balance a whole host of factors that contribute to the guest experience -- community programs, reliable infrastructure and amenities, customer service, stunning furnishing, and more.
“Smart technology is a necessity to enhance customer experience”
To cope with the barrage of new customers, hospitality businesses are increasingly integrating smart technology and IOT solutions into their properties to value add to the guest experience. A growing industry henceforth necessitates an industry-wide adoption of automation, presenting a multitude of opportunities for the burgeoning hospitality sector.
Particularly pertaining to safety and privacy, the increasing accessibility of communal spaces, reinforcement of security checkpoints have become even more crucial.
This inevitably exerts an incredible pressure on big and small businesses to adapt fast and adopt new technologies to cater to each guest’s communal experience while upkeeping high levels of safety amongst residents.
And here is where smart access solutions fit perfectly in the ecosystem.
Safeguarding quality experiences
No longer struggle with distinguishing keys across multiple apartments, nor schedule your over-worked employees to manually handover keys at odd hours of the day.
With full integration to rental platforms, instantly eliminate the need to deal with jet-lagged guests and allow your smart apartment to provide them with the best customer service they need in the wee hours of the morning – sans sleep-deprived employees.
Even small homeowners are hopping on the train of convenience, with 1 out of 4 homeowners keen to purchase smart locks for personal home use, there is clear market consensus that smart access will only grow more prevalent. As consumers become more accustomed to their personal digital home locks, so will they to your property’s smart locks. They are also more likely to view it as value-added amenity, thus increasing the attractiveness of the property too.
Property developers will do well to recognise that technology goes hand in hand with convenience and expedience, and deliberate their next technology purchase to curate an improved experience with satisfied tenants.
An entirely new dimension of behavioural and consumer tracking is established with facilitated access to data.
Smart homes, for instance, opens up the possibility for property owners and managers to restructure and streamline practically every system in the building. If implemented in a co-living space of similar structure, the pace at which customer journey goals are achieved could be accelerated.
Data collected from the integrated system enables property managers to make effective operational decisions based on accurate analyses. With accumulated data on check-in and check-out timings, building access patterns can be subsequently mapped out, giving managers better estimates and suggestions for physical on-site scheduling.
Success in building communal spaces is a long-term game. To accurately spot, analyse and subsequently act on actual trends will involve the collection of massive heaps of data. Businesses currently not leveraging on their customer’s movement patterns are missing out on salient customer profile characteristics.
In abolishing menial drudgery like physical on-site trackers, or check-in staff, it frees up new capacity that allows organisations to devote mental energy to more value-adding human interactions, efficiently improving guest relations by leveraging insights from data.
Embrace the change
As co-living gains mainstream acceptance, the accelerated penetration across demographics wields immense potential for developers and investors amidst the convergence of new technologies, advocating for the rise of the sharing economy.
Ultimately, as with any service industry, competition is key.
The intense pace at which the accommodation space is transitioning in light of ecological and sociological factors will push developers to develop a strong sense of empathy to build experiences that truly improve the guest experience. This also involves the consistent stocking of supplies at communal areas, developers are bound to recognise the transformative potential of new technologies, the very enabler of the renewed co-living movement today.
In the modern digital age, inflexible incumbents will be edged out if they fail to adopt new, evolving technologies that the digital zeitgeist is accustomed to.
At igloohome, we are committed to empower developers by ensuring the seamless integration of technology for properties worldwide, and pride ourselves in developing innovative solutions to help your property thrive. Speak to a representative today for a demo, trial or to learn more about our smart access solutions!
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