Co-living provider Medici Living Group and investment manager Corestate Capital have launched a €1bn (£900m) Europe-wide investment fund.
The partnership is the largest co-living investment in the world to date and plans to acquire around 35 assets across the continent over the next three to five years.
The pair will work together on acquisitions and conception of properties in Austria, Switzerland, Spain and Poland, which will then be managed under Medici Living’s young professional co-living brand Quarters.
Berlin-based Medici Living Group is the largest co-living provider in Europe, with a portfolio of 1,800 homes in Germany, the UK and the Netherlands.
Gunther Schmidt, chief executive at Medici Living, said: “This investment is the breakthrough for co-living in Europe. The residential market is significantly larger than that for office assets. We want to become the WeWork of co-living.”
Medici Living Group will be responsible for conceptual design and operation, and Corestate will handle the investment, project development and asset management.
Michael Bütter, chief executive at Corestate, said: “Urbanisation, young people’s desire for community as well as the opportunity to live and work in different cities, are boosting demand for communal residential space.
“Investment in the co-living segment is characterised by the low risk profile of residential property paired, however, with higher yield expectations. Investors will profit from Corestate’s Europe-wide expertise in deal sourcing and the operative know-how of Medici Living.”
The fund will see the partners go head-to-head with the UK’s co-living leader, The Collective, which has a pipeline of 6,500 units in the UK, Germany and the US, and is backed with $670m in equity and debt. WeWork is the dominant player in the co-working space, with an estimated 15,000 co-working spaces in 2017, expected to grow to 3.8m by 2020.
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