Dubai: Are sizeable numbers of first-time residents in Dubai opting for a co-living rental option? Especially if they are in the 20’s or early 30’s and still working their way into new jobs or projects they have taken on?
It seems so, because co-living rental spaces are showing up in more listings, while the actual lease rates too seem to be firming up, according to market sources.
“When I search across Dubai, the last one came back with 3,500 (co-living) rooms (listed),” said Danielle Hall, founder of Co-Living Legends, which works closely with developers and landlords to lease and manage such rentals.
“If one goes online to search for a room to rent in say, the Dubai Marina, you will find hundreds of options. These range from individuals offering a room in their own homes, friendship groups or colleagues already house-sharing and who need a third or fourth housemate.
“However, established companies with a proper model - like Co-Living Legends - are still few, especially compared to cities like London or Berlin, for example. The need and demand are there, but the providers are still fairly small in number.”
Market sources say if current demand levels hold up, the size of the co-living market would expand to take on another 3,000-5,000 rooms in ‘no time at all’.
How much are co-living rents going for?
Danielle’s mention about London or Berlin is telling. Think of co-living as a step up on student dorms, but with its own set of well-defined rules. For Dubai’s property market, it’s also a widening of the rental options that are available in the city, which is now seeing a significant expansion of its resident base as new entrants call it their home or place of domicile. Some industry observers say, co-living rental sub-market is at the same point that short-term rentals were about 5-6 years ago in Dubai.
Listings show current co-living room rentals at Dh4,000 and over for a month. And top-of-the-range options crossing Dh6,000. (Obviously, those seeking co-living spaces in Dubai are not opting for the cheapest options, but more the convenience and the lifestyle.)
As with the wider Dubai rental market, we are witnessing co-living assets also see a rise in rates. Most leading co-living operators are having high occupancy levels as young and upwardly mobile users prefer the flexibility and communal amenities that these properties offer...
According to Hamza Abu Zannad, co-founder at Axiom Prime Development, the market has already turned for co-living in Dubai. “This has become most sought after by new expats,” he said. “An investor, purchasing a two-bedroom plus maid apartment and optimizing it for shared living can tap into high yielding and secure premium rentals. Especially as extra rooms – even the maid's quarters - fetches the highest returns.”
Another opportunity for landlords?
Rentals across the board keep gaining in Dubai, with the recent RERA Rental Index updating creating another opportunity for landlords. Some of them are also exploring whether leasing out as co-living can get them higher than market average returns.
“Co-living is often misconstrued as bed spaces and creating overcrowding,” said Danielle. “Which it definitely isn’t. At our units, no bedroom is occupied by more than one person. A 3-bedroom hall kitchen is for three people and so on.
“I think more developers and landlords need educating about what co-living actually is. We prefer all of our bedrooms to have an en-suite and to have their own AC control. Many buildings in the city don’t always have such options.”
Who’s leasing these co-living spaces?
“Those from clusters of similar industries such as realtors, legal and marketing execs, events planners, online business entrepreneurs, etc.” added Danielle. “We also have companies approach us to house small groups of their staff.”
That could be another growth area that landlords could look into – leasing out to corporate clients for relatively junior staff members who are in the UAE for short-term stints. And where a typical lease for the co-living spaces could be between 6 months to a year.
This is a market where landlords hold all the aces. They can choose between offering their units for annual rentals, short stay or holiday homes, or co-living. And each one can deliver the optimum returns they are looking for.
