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New regulation of Coliving to attract investment

| News | Urban Planning and Environmental Law / Real Estate

Antonio Ñudi analyzes the phenomenon of coliving in Spain, its implications and regulation, following the recent publication, together with Carlos Peña, also a partner of the firm, of the book "A space for coliving"

El Independiente interviews Antonio Ñudi, Andersen partner in Spain, on the phenomenon of co-living in Spain, its implications and regulation, following the recent publication, together with Carlos Peña, also partner of the firm, of the book "A space for co-living".

The co-living phenomenon is advancing in Spain. Real estate companies are already exploring the possibilities of a new business model that goes a step beyond the traditional flat-sharing and seeks to create community. But the lack of regulation is still the main obstacle for investors.

With the aim of shedding light from a legal and urban planning point of view, Antonio Ñudi Tornero and Carlos Peña Rech have just published 'A Space for Co-living' (Fundación Arquia). Approximately three years ago, both partners in Andersen's Public and Regulatory Law Department began to receive requests for advice from their firm to implement new projects in our country.

Now, both put in black and white all that they have researched over the years and give voice to operators, analysts and investors on the outlook for what they define as a phenomenon that offers answers to those who are looking for a different way of living, more flexible and adaptable to their needs.

How does co-living differ from flat sharing?

Co-living is a space where those who are going to live are looking for something more than just sharing a room because it is cheaper than going alone to a flat. It is a more aspirational product where the important thing is the community that is created around that space. There must be a certain affinity between those who live there, because they are not just looking for a bed or a room; they are looking for that interrelation with the rest.

What would be the profile of the tenants of this type of accommodation?

There can be as many profiles as each type of community. There may be people who have already passed the student phase and are starting to work or who are thinking, for example, of creating a company or a start-up. The people who are going to live in this co-living will probably be looking to create synergies with those who are there and who can help them to develop their business project.

We would be talking about relatively young people, wouldn't we?

Well, between 25 and 35 years old. In the book we mention the case of gamers, who are people very interested in video games. This creates community spaces that favour this interrelation and the development of their activity, profession or hobby. This can also happen in the case of artists and sportspeople.

In addition, there is a sector that fits in very well: corporate expatriates. That is to say, those whose company sends them to develop a project in another city for a period of a few months or a year without their family. In the end, there are interests of people who are living a similar situation, although they are in different companies and in different projects. They have a similar vital link and are interested in meeting people as soon as they arrive in the city.

I understand that this also serves to avoid the whole process of going to see houses, buying furniture, etc... Yes, you go into a place where there is a lot of work to do.

Yes, you come into a place where you have everything from the very first moment and you don't have to worry about furnishing, or signing up for a Wi-Fi network, or contracting utilities or cancelling your contract when you leave.

Is the selection of profiles also done by the company that manages it?

Exactly. It's very important for that company to be very professional, because they must select the profiles to fit that community that they want to create. The more they can do that, the more successful that community can be.

Where are these spaces located, are they buildings or entire floors of a building?

Normally it is a complete building, and the sizes range from ten or fifteen rooms to the largest ones, which can reach up to two hundred. This does not mean that it is not possible to have a building that mixes a co-living space with a few floors dedicated to traditional housing or a hotel.

Does it fit better in urban environments?

While it is true that initially the environments are more urban and above all the city centres, there are co-living that are on the outskirts of a city but with good communication with the centre. But there is co-living that are on the outskirts of a city but with good communication with the centre. Moreover, we are starting to see them in rural environments as well.

What is the average price of a co-living room in cities such as Madrid, Barcelona or Seville?

It is also difficult to say, but you can have rooms for two people with bathroom included and a mini kitchen in the centre of Madrid for around 800 euros. But the important thing is that you can make the price very ad hoc depending on the services you want. That is, if you want to have your clothes washed twice a month or twice a week; or if you want to have a small kitchen inside the room or have your food brought to you.

What is the biggest difficulty encountered by operators of this type of business?

In Spain right now, regulation is almost non-existent. There is only a decree in Catalonia that was approved in 2020 and that, in my opinion, does not cover co-living as it should because it is seen as a kind of housing solution for those who cannot access housing. I think this is a mistake because co-living is much more than that. As a result of the modification of the rules of the General Urban Plan of Madrid, the City Council has also begun to regulate it with much more success. The framing that is being done makes much more sense to me so that the investment that is looking at co-living sites comes to Madrid.

What kind of opportunity does this present for investors?

I think the future is very good because the demand is there. And when the demand is there, everything makes sense. Now, the challenge is to get the regulation right so that the investment can be sure that it is the ideal place to do it. Spain is a very attractive country for this type of project because what we are looking for is coexistence. And there could not be a better country in the world to implement this product, because of our good climate, the quality of life and the way we like to interact and meet other people.

Moreover, it is a product where there is a lot of innovation, with technology and a lot of architectural design that takes energy efficiency into account. Technology is extremely important in this type of product. Big data and artificial intelligence are going to be key for these companies to become big enough to be profitable as well.

And what is the profile of these investors?

There are traditional real estate companies that are opening new lines of alternatives. Another profile may be companies that have traditionally been dedicated to developing student residences and see this as a step forward. There are also those dedicated to residences for the elderly. In the real estate sector, the needs of users at each stage of our lives are increasingly being listened to. Until now, we were always offered the same thing, whether you were sixty or twenty-five years old. There is also another profile of investors: companies that are already operating in other places such as Brussels, London, Amsterdam or New York, and that want to come to Spain.

How many companies do you estimate are in this business right now?

It is very difficult to know because there is no register of co-living operating companies. But I think that practically any large real estate company right now has a part of its structure dedicated to analysing this type of project.

Does the new housing law being prepared by the government regulate this phenomenon in any way?

In its explanatory memorandum, the current draft of the Housing Act announces and talks about the new models of cohabitation, but it does not really regulate anything at all and leaves it up to the autonomous communities to make progress in this regulation. It says practically nothing, except to recognise that these new cohabitation models exist.

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