With rents at all time highs, co-living operators are expanding

Co-living operator UKO has opened a new asset in Alexandria on Sydney's outskirts
An undersupply of rental accomodation has driven rents up
UKO has several project in the pipeline across Australia

With the rental market critically undersupplied and rental asking prices at all time highs, Build to rent (BTR) and co-living operator UKO is opening its 18th asset in Sydney’s city fringe suburb of Alexandria.

Domain’s latest rental report revealed that house rents increased 4.8% over the September quarter to a new record high of $650 a week while unit rents have seen the steepest annual rise on record, at 14.6%.

Data from SQM reveals an almost consistent decline in the national rental vacancy since the end of 2020.

UKO, which is part of Veriu Group has reported a 98% occupancy rate for its Sydney assets.

The company has reported that over 1000 apartments are seeing weekly rents between $700 to $1,500 (45 – 120 sqm room size) and co-living studios are averaging $490 to $650 (22 – 36 sqm room size).

UKO co-founder Rhys Williams expects demand to remain strong, driven by positive net migration and a significant undersupply of rental accommodation.

The new Alexandria property, named Industry, was developed in partnership with Sasco Developments. The now fully leased property was 70% pre-leased before the opening.

Industry comprises 69 studio and loft apartments. Image – Supplied

The building operates under UKO’s co-living model where tenants enjoy a private fully furnished apartment but also access to a range of communal areas like a chef’s kitchen, social lounge, co-working area and private meeting space.

Co-living in demand

UKO’s philosophy is about embracing community living. It was founded in 2018 with the mission to fight the loneliness epidemic in Australia.

“A wide cohort of renters have embraced the opportunity to adopt community living, much of which has been driven by the need for companionship,” Mr Williams said.

While Alexandria has recently launched UKO and Sasco Developments has several projects in the pipeline.

Sasco Developments director Joseph Sassine said, “Industry is Sasco Developments’ third project with UKO and a fourth will be located in Meadowbank with construction anticipated to start mid-2023. This project will be the first mixed use building encompassing co-living with 162 co-living studios, 133 BTR apartments (total 295) and a retail centre.”