Demographic change behind the surge of coliving, whats next?
Franck Lirzin, Gecina, talks about the drivers behind the coliving craze.
How attractive is the alternative residential market in France?
The residential market in France is going quite well. It’s quite attractive at the moment because it’s a long term business, so there’s certainly much demand for this.
One reason for the growth of the market is demographic changes. There’s much more young people looking for apartments and flexible living assets. There’s also a trend of smaller families, so the average 2+ person household is now becoming closer to 1.5 person per household. A lot of this is down to younger people seeking apartments alone for convenience, affordability, or flexibility. These factors explain the growth in demand for more coliving assets and smaller residential units.
How would you position France in the wider European market?
I think that first of all, it’s growing. This isn’t necessarily the case in Germany for example, due to emigration and an aging population. One problem that can be said about France is that as it’s hard for foreign investors to enter due to fiscal regulations or public planning. We think that there are big deals to be made in the French market, but you at the very least need a local partner to navigate these disadvantages and seek the best opportunities. And it’s very different from city to city as well.
What are some trends you’re seeing in how people are deciding to live?
What we see from our clients is that they are looking for their buildings to be more social. Because we’re now in a digital world, people tend to think everything’s about digitalisation but its not; in fact we have way more requests to make spaces more communal and sociable. So we’re focusing more on installing dedicated teams for our tenants, to provide the highest level of convenience for them. Whether it be students, young professionals or families, what they’re really looking for is simplicity and ease.
So whether it’s student housing, coliving, multifamily, it’s all services and human interaction. It’s not all the same business model of course, but in the end the front end services will become more and more similar. And this is exactly what we’re investing in.
I think we’re right at the beginning of a very big digital revolution. Residential has historically been quite an old-fashioned sector in terms of business model and management, and a pure focus on real estate. I think now, as technology is making clear strides in increasing productivity and user experience, it won’t be more than a decade until all residential buildings become completely digitalised. And the biggest change will be from managing real estate assets to managing services and improving the user experience.