ASX-listed specialist private equity firm Teaminvest Private Group is setting up a new managed property fund that will focus on investing in the rising co-living sector.
Its new Co-living Future Property Fund, or the CFPF, will make investments (including debt and equity placements) into businesses such as management firms, co-living system operators, innovation and technology firms.
CFPF’s chief executive, Craig Wright, told The Fifth Estate the sector was fast growing and the fund had been created with the aim of bridging growing affordability gaps for many people.
While the fund won’t target any particular demographic group, Mr Wright said the model was well suited to people such as single women over 50, who were the biggest cohort facing homelessness in this country, or same sex couples that might not have extended family to call on.
“It’s a way of looking at how this particular asset class could start to reshape and reform what aged care looks like, in that space,” he said.
The wholesale managed fund has a minimum investment of $100,000 and offers a targeted 8 per cent net annual return.
CFPF claims it has already signed terms with a referral partner who will white-label the fund, with some wholesale investors currently in the application process.
Co-living is a housing model where three or more unrelated people share a property – a bit like a co-working space, except for housing.
Typically, each resident has their own small personal space, including an ensuite bathroom and basic cooking facilities, but this comes with access to common areas for work, play, and learning, some of which can be quite elaborate.
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There’s a sustainability dividend possible with this asset class; it’s got shared communal spaces lowering the level of resources needed to house a certain number of people plus the social sustainability of semi-communal living and the potential for more affordable housing.
Co-living can also target towards meeting the needs of particular groups of people, such as business professionals, travelling entrepreneurs or students.
CFPF’s chief executive, Craig Wright, told The Fifth Estate it’s a very fast growing part of the market, in a broader market where the price points for property are unaffordable to a growing number of people.
“The fund has been created, ultimately, with the purpose of bridging the affordability gaps that are in the market currently, making property more available to more people.
“We’re looking at a more sustainable approach to what residential housing or shared housing looks like in the future.”
A big point of difference for the CFPF, Mr Wright said, is that the fund will not be limited to any specific profile of co-living property or any particular demographic of resident.
The fund will potentially provide equity or debt (or both) to builders and developers that are creating co-living properties, service providers (such as property care, maintenance or management firms) and property tech companies.
“If we look at how this style of property is being used in the aged care space, we could hold a position in the healthcare operations that are bolted on as a service to these types of properties. Property technology is another space,” Mr Wright said.
“Certainly, based on the research that we have been doing, there is no one that has provided investors a diversified approach. You can always go and invest in a fund that is doing project A or project B down the road, but no one is offering a broad based asset portfolio.”
While CPFP is not targeting a particular resident demographic, there are a number of tenant or resident profiles that are well suited to the co-living model.
“There’s a lot of media and a lot of coverage at the moment about how single women over 50 are the biggest cohort facing homelessness in this country,” Mr Wright said. “And so, if you look at like minded people living together in communities, then there is an example of how co-living could actually create community in that space,” he said.
“If you look at same sex couples, or same sex married couples, who might not have legacy or extended family, it’s a way of looking at how this particular asset class could start to reshape and reform what aged care looks like, in that space.“