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Modern renters increasingly favour flexibility in their choice of accommodation across short, extended and long-term stays, driving a rise in coliving spaces. Hybrid living – a flexible, future-ready approach appealing to a wide range of customers with different lifestyle needs - is perfectly placed to offer this flexibility and respond to renter demand with its unique mix of multi-functional spaces.
Using insight from our CEO and Founder, Giles Horwitch-Smith, this article explores growth in the hybrid living industry, strategies for operators looking to leverage flexible stays, the essence of community, and how PropTech has become the backbone of coliving operations.
Why hybrid living is gaining momentum
Categorised under several asset classes – including coliving, Build-to-Rent (BTR), Purpose-Built Student Accommodation (PBSA), senior living, and aparthotels – hybrid living resonates with a wide demographic of young professionals, students, multi-family households, and seniors.
In the first quarter of 2024 alone, £258 million of investment was poured into coliving acquisition and development, accounting for a fifth of UK BTR spend. As of 2023, the sector comprised 25,021 existing or proposed units, with industry growth almost trebling over the last five years.
82% of the UK market is currently concentrated in the capital, however, regional cities present a major development opportunity, especially as these areas host large populations of millennials – the core target demographic for coliving. The KnightFrank 2024 Coliving Report found that 72% of coliving tenants ‘are aged between 26 and 40, with the largest proportion aged between 31 and 35.
Significant factors driving industry growth include the cost of home ownership and a surge in digital nomads, having grown by a staggering 131% since the pandemic thanks to hybrid work lifestyles. The appeal of coliving lies in its central locations, flexible tenancy options, high-quality amenities, and community-oriented living – giving it an edge over traditional renting models.
It’s predicted that greater awareness of the benefits of coliving, including how rent and bills are bundled into a single fixed monthly payment, will increase customer demand further. The example of Dandi Wembley leasing all of its 360 beds in only 3 months highlights the speed at which coliving developments can reach full occupancy.
Operating flexible stays for profitability
Developers and asset managers are best positioned to maximise profits by offering a mix of high-quality living spaces with flexible tenancy options.
“Running different lengths of short and long stays can maximise occupancy throughout the year, increasing operating income by several percentage points depending on location and seasonality” (Giles Horwitch-Smith).”
An example of this flexibility in high-quality spaces can be seen at The Collective Canary Wharf, which combines long and short stays for coliving residents, transient tourists and business travellers. Private ensuite rooms sit alongside leisure facilities, workspace, shared kitchens, laundry rooms, event space, cinema rooms, and communal lounges.
“By offering adaptable living spaces and shared amenities, tenants are more likely to stay longer,” comments Giles. A typical coliving tenancy ranges between 3-12 months (but can extend for up to three years), reports Savills Coliving Spotlight.
Longer stays minimise vacant periods and rates while reducing turnover costs, contributing to operational stability. On the other hand, limiting an asset exclusively to long stays can lead to missed opportunities for maximising revenue during peak seasons.
Coliving spaces in seasonal tourist hot spots can benefit from a flexible approach by offering long-stay tenancies during quiet months, before converting to a short-stay hostel model to capitalise on demand during peak tourist season.
The same goes for PBSA properties that accommodate students during academic term times and tourists during summer breaks. Giles highlights that Property Management Software (PMS) helps maximise the profit of assets throughout the year, stating that “a PMS that includes yield management can help operators optimise pricing across different segments and periods of the year.”
Operator profit can also be maximised by adapting and monetising spaces serving multiple purposes. For instance, a property utilising seasonal flexibility may offer discounted coworking membership to coliving residents and the local community during the low season, converting workspace into communal social areas during peak tourist seasons, with an added layer of F&B.
An all-in-one PMS manages these flexible spaces, with bookable amenities such as desks, meeting rooms, and event rooms, reserved and paid for instantly using flexible coliving software.
Reinforcing this need for flexibility, Giles states: “Diversifying your target audience helps maintain high occupancy across different seasons and economic conditions.”
Community is the essence of coliving
Since the pandemic, community and social interaction in coliving spaces have been significant draws for many residents. Creating and maintaining this sense of community and belonging among residents can be challenging for operators when combining flexible stays.
“Balancing privacy with the social aspects of community living can be difficult,” says Giles, particularly when one is emphasised over the other. By their nature, short-stay guests aren’t going to integrate into the community or interact with long-stay residents. Tension also builds when workspaces and leisure facilities are shared.
One potential solution lies in the seasonal operational model, where operators can focus on building community during long-stay periods while ensuring high satisfaction and smooth turnover in peak short-stay seasons.
Here, transparency is crucial – communication with residents about seasonal operations and expectations around lease lengths helps the transition between long and short-stay periods.
Technology plays an integral role in enhancing this balance between types of stay, especially as virtual communities extend the sense of belonging beyond the physical premises. By offering digital memberships for non-residents or alumni, operators can create lasting connections with former tenants, particularly appealing to digital nomads who value global community ties. “Building a strong social and digital community is key to retaining tenants,” says Giles, indicating that tenants might return for the next long-stay season.
Equally, smart access management systems benefit user experiences by granting certain access rights to residents and members, while gently informing short-stay guests of theirs. Likewise, residents can omit visitors, maintaining safety and security across the building.
Overall, Giles explains: “Creating flexible living solutions in coliving involves balancing design innovation, operational efficiency, community, and the integration of technology to meet modern living demands.”
Proptech is the backbone of hybrid living
Technology facilitates the smooth day-to-day running of coliving properties, reduces overhead costs, and streamlines operations. Automating processes, including billing and housekeeping, frees up property managers’ time, allowing them to focus on community-building activities.
One of the UK’s fastest growing coliving brands, Gravity Co, found operational efficiencies that allowed them to focus on expanding to new locations while curating a thriving community when adopting res:harmonics PMS across its locations.
PropTech is essential to the operational success of hybrid living models. As Giles explains, software that ‘enables flexible lease terms and customisable living arrangements across flexible stays help operators simplify complex processes, reduce context switching and increase profit’.
A property management system manages operations by simplifying varied lease terms, financial management, and tenant verification. An all-in-one PMS allows short-stay guests to book online, pay, and receive instant confirmation, all while taking long-term prospects through any extended booking steps, including affordability checks, inventory management, and digital lease signing (similar to the traditional leasing process).
While managing flexible spaces and amenities, PropTech also captures valuable insights and data analytics “that help coliving operators make informed decisions about space usage, tenant preferences, and operational performance,” expresses Giles.
Examples of this insight include smart sensors tracking amenity usage for layout and service optimisation based on actual tenant behaviour, while predictive analytics forecast demand for different stay types, adjusting pricing strategies to maximise occupancy and profitability.
“PropTech plays a crucial role in accelerating and optimising hybrid coliving models by enhancing operational efficiency, improving tenant experiences, and driving sustainability,” says Giles. With smart technology, energy usage and sustainability metrics can be managed more effectively. Sustainability-focused IoT technology is a key driver of tenant decision-making that attracts greater investment opportunities
A centralised coliving software allows operators to scale efficiently and manage properties remotely, helping them maintain high efficiency while growing their portfolios. Expanding across multiple locations demands tech-driven solutions that automate processes, which is exactly what flexible living software can do.
The future of hybrid living with PropTech
Beyond simplifying operations, PropTech empowers operators to create adaptable, community-driven environments that appeal to different tenant types. Its impact extends to maximising profit, improving sustainability, driving cost efficiency, and enhancing tenant satisfaction through data-driven experiences. Tech-enabled hybrid living operators are best placed for scalability and expansion to multiple locations.
The future of hybrid living lies not just in providing housing, but in creating richly interactive and tech-enabled experiences and communities.
The panel discussion “Navigating Hybrid Typologies” was explored at the Coliving Conference 2024, moderated by Anastasia Osipov, Director Development Germany at Motel One Group, and participated by Giles Horwitch-Smith, founder and CEO at res:harmonics, Samuel Gielis, co-founder at Allihoop, and Santiago Espinosa, co-founder and CEO at Monton.
Get in touch if you’d like to discuss how we can help you maximise profit in hybrid living properties.
Download the Ultimate Guide to Coliving Property Management Software to find out more.
