Frankfurt-listed Corestate Capital Holding and Berlin-based co-living service provider Medici Living have agreed to invest €1 bn of equity and debt in the European co-living sector over the next three to five years.
The parties will work together on acquisitions, conception and management of the properties. The cooperation marks the largest investment into the emerging co-living asset class worldwide to date.
'This investment is the breakthrough for co-living in Europe,' said Medici Living founder and CEO Gunther Schmidt. He believes that the new asset class has even greater potential than the already thriving co-working sector. 'The residential market is significantly larger than that for office assets. We want to become the WeWork of co-living,' he added.
In addition to Medici Living’s current European target markets of Germany, the UK and the Netherlands, the new investment programme will target Austria, Switzerland, Spain and Poland.
The focus will be on cities with more than 500,000 inhabitants and properties – existing as well as new-build – with an investment volume of between €20 mln and €60 mln. The partners expect the programme to include around 35 assets in total, which the Medici Living Group will operate under the Quarters brand, which mainly targets young professionals.
Under the agreement, Corestate will take care of investment, project development, financing, asset and fund management while the Medici Living Group will be responsible for the conceptual design and operation of the properties. Already the largest co-living service provider in Europe, Medici will add an additional 6,000 rooms to its current portfolio of 1,800 rooms.
Michael Bütter, CEO of Corestate said: 'Urbanisation, young people’s desire for community as well as the opportunity to live and work in different cities, are boosting demand for communal residential space. Investment in the co-living segment is characterised by the low risk profile of residential property paired, however, with higher yield expectations.
'Co-living properties optimally complement our current product range in the micro-living sector. It is a new, rapidly growing residential segment that covers millennials’ rental requirements,' added Thomas Landschreiber, CIO and co-founder of Corestate.
See also the interview with Anil Khera of Node Living which appears in the December issue of PropertyEU Magazine.
