Global commercial real estate and investment management company JLL has sold two co-living developments in Kingsford, Sydney, for a combined $20m.
Situated at 65 Willis Street, Kingsford, nearby UNSW, the Prince of Wales Health Precinct, and the Kingsford Light Rail line, the UniStudio scheme was sold to a private investor for $10.4m at a yield of 6.48%. It was the latest acquisition in the sector by the buyer.
The four-storey building comprises 33 self-contained, fully furnished studios, each featuring kitchen and bathroom facilities, living and study space, and select rooms with balconies or outdoor spaces. It provides a net passing income of $608,128 per annum.
Situated at 87-91 Middle Street, Kingsford is a DA-approved site and was also purchased by a private investor for $9.8m.
Approval has been granted to construct a 68-room New Generation Boarding House. The purchaser plans to develop and hold the property.
JLL stated that co-living is increasingly popular with investors and developers looking to enter the long-term residential market.
“The appeal of co-living developments is that it offers a greater density on-site and provides investors with a diversified cash flow from the multi-unit projects.”
Gordon McFadyen, Joint Head of Metropolitan Sales and Investments NSW, JLL
Co-living also provides market exposure to private investors and smaller funds seeking to capitalise on rising residential rentals as the demand for medium-term accommodation snowballs in an undersupplied residential market.
JLL also believe that co-living appeals to investors as it is cheaper to operate than serviced apartments and has the flexibility to tailor service offerings.
The Australian co-living market has matured recently, with a series of significant projects being recently announced in inner Sydney.
As investor interest in the market increases, JLL’s two latest sales follow the recent $15.5m sale of an established UDIA award-winning freehold co-living development in Surry Hills.
The scheme at 46 Foveaux Street comprises 32 self-contained studio apartments and ground-floor retail. It was sold by JLL at a yield of ~5%.
JLL state that the hotly contested sale was the latest deal of more than $200m that the company’s Head of Metropolitan Sales & Investments had transacted in the sector in the past two years.
