European real estate fund manager DTZ Investors (DTZI) and co-living platform The Collective have together launched COLIV, the world’s first large-scale co-living fund. The new partnership seeks to raise up to $815 million in total equity commitments, with DTZI serving as the investment advisor to the fund while The Collective will act as asset manager and property manager.
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DTZI and The Collective will look to acquire or finance between six and 10 co-living properties in London, with a total gross asset value of $1.3 billion over the life of the 10-year fund. The fund launched with $88 million of seed capital, with both DTZI and The Collective committing to the $12.5 million sponsor co-investment.
Chris Cooper, CEO of DTZI, said in the announcement that the firms seek to help address the housing shortage in London with the new fund, which they hope will also encourage community building through the new co-living communities.
The fund has already made its first acquisition, with a deal to finance The Collective Harlow, a new co-living community located in Harrow, a borough of London. Construction is underway at the property, which will rise nine stories and comprise 222 shared rooms, 5,000 square feet of incubator space geared toward local startups and 6,800 square feet of amenity space that will include a gym, library, theater, mindfulness lounge and a communal kitchen. The community is slated to be completed in 2021.
Co-living’s footprint grows
As cities across the U.S. and Europe struggle with a shortage of housing and affordable options, the co-living model has emerged as a possible solution for urban renters. Last month, co-living brand QUARTERS announced its first development in Austin, Texas, where the company will build a 120-unit community slated to open in 2021.
In New York City, where Mayor de Blasio’s administration is aiming to hit its target of 300,0000 new and preserved homes by 2026 as part of the city’s Housing 2.0 plan, city officials are taking a closer look at the co-living model. The city’s Department of Housing Preservation and Development is working on a pilot program called ShareNYC that would partner with private developers to build affordable shared housing.