Corestate Capital is expanding its micro-living offering to include co-living by joining forces with Medici Living to create a €1bn venture.

The €25bn manager said it has entered into a partnership with Medici to build a co-living portfolio worth €1bn across Europe within five years with investor money.

As part of the cooperation, Corestate said it will identify, acquire and develop for its clients ideal sites and properties.

”The focus will be on cities in the German-speaking countries, Spain and Eastern Europe, with over 500,000 inhabitants and real estate with an investment volume of €20m to €60m,” Corestate said, adding that several properties are already in the pipeline.

Thomas Landschreiber, CIO and co-founder of Corestate, said: “Together with Medici, we want to play a leading role in shaping the co-living market in Europe.”

Co-living properties optimally complement our current product range in the micro-living sector, Landschreiber said.

 “It is a new, rapidly growing residential segment that covers millennials’ rental requirements. They are looking to exchange ideas with like-minded people in a modern living space and experience community, no matter in which metropolis they are currently working.

“Our investors will also benefit from this trend. Through us, they have the opportunity to invest in a unique product range in the micro-living sector at European level,” Landschreiber said.

Gunther Schmidt, founder and CEO of Medici Living Group, said: “This partnership is the breakthrough for co-living in Europe”.

The residential real estate market is much larger than that for office real estate, Schmidt said.

“We are building the WeWork of co-living and Corestate’s investors can participate in it.”

Medici, under its Quarters brand, operates co-living spaces worldwide, including in New York, Amsterdam and Berlin.