The largest co-living operator in the US has agreed its first international deal, taking on 664 build-to-rent flats in London.
Common has agreed partnerships with investors London Green and SAV Group, and aims to grow its exposure to around 3,000 flats by 2023.
In the US, Common has 7,000 operational homes across co-living, micro-homes and BTR homes. It also has 22,000 homes in development in 22 cities and more than $110m (£80m) in venture capital investment.
Its UK launch comes almost two years after Common first mooted plans for expansion. It follows a high-growth period for the tech company – which started in co-living but has broadened to BTR – and has more than tripled its US portfolio since the start of 2020.
Founder and chief executive Brad Hargreaves (pictured) told EG: “If you think about how our business has evolved in the US, we’ve seen the merger of BTR and co-living.
“We think the opportunity here in the UK is BTR and we think co-living is a really interesting and compelling sub-category of that.
“That means co-living as a type of unit within BTR that diversifies your BTR product and creates a lower rung on the ladder for people to get into a great building, highly-amenitised and great location.”
The initial portfolio from London Green and SAV Group comprises five buildings in central London boroughs including Wandsworth and Westminster, with an average size of more than 100 flats.
Common will provide branded property management operations and services, such as wellness programmes and cooking classes, with discounts for brands, services and off-site events. The first property is expected to open in the second half of 2022.
Hargreaves said: “It’s a renovation, that’s how we’re able to get to market so quickly. We’re also working on a number of ground-up sites with longer lead times – those won’t open until the end of 2023 and beginning of 2024.”
The initial portfolio is focused on core London, but partnering with local developers Common aims to grow rapidly to new markets. The company is negotiating deals in Dublin and Madrid, among other cities.
“From this point once we’ve expanded, it’s a two-pronged approach: one is thinking about the regions here in the UK and the second is other major European capitals,” said Hargreaves.
The European business is led by Brian Lee, managing director of Common in London. Lee joined Common in 2018 and was previously a senior director for development at Tishman Speyer in New York.
In 2020, Common raised $50m (£39m) from Swedish firm Kinnevik to boost its platform for BTR and international growth. Its BTR strategy has been supercharged through a partnership with Nuveen Real Estate in the US, which it hopes to expand globally.
While many co-living specialists have suffered during the pandemic, Common’s partnerships with institutions and asset-lite business model have allowed the company to grow substantially during lockdown. After rival platform Starcity acquired operator Ollie, this summer Common took over Starcity, adding 7,500 homes to the portfolio.
In the UK, the recent administration of The Collective has raised questions over the future of co-living in the wake of the pandemic.
“There’s nothing fundamental about the sector that is problematic,” said Hargreaves. The offering provides community and affordability, he adds. “Co-living is still really important and serves a key need, but I don’t necessarily look at it as a completely separate thing from BTR.”
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