Co-Living in Dublin: The Future or Fad?

We are well aware of the co-working explosion in Dublin over the last couple of years with companies like WeWork, Iconic, and the Dogpatch Labs. The latter of which, I had the pleasure of a guided tour of recently after a Dublin Chamber meeting. These are penned as cool contemporary work places for the 21st century, for the self employed, millennial freelancers, and remote travelling workers looking for a regular alternative to working from home, starbucks, or even hotel lobbies or rooms.

Hot out of the traps after co-working, is now co-living in the capital. A concept which has been in existence in cities like New York, and London for quite some time now. The concept which is spreading globally is to provide small modern bedrooms, with en suite with adequate personal storage to tenants. However, where the big distinction is between the co-living concept to a standard residential apartment block is the large communal spaces like the kitchen, living area, which are shared by all the tenants of the building.

The first co-living space opened on Pembroke Street last year called Node - and it has been a big success to date filling up the units extremely quickly with rents in excess of €1300 per room to boot. The Node owners are already looking for additional locations across Capital, as more co-living companies have now entered the Dublin market like UK based "The Collection" which bought Fumbally Lane in Dublin 8.

Co-living seems to be here to stay for the foreseeable future. The whole co-living discussion has been simmering below the surface of the property and construction industry for the past few years, however, over the last 12 months this has taken hold of the public’s imagination so as an industry, we need to talk about co-living - the good, bad and ugly of it.

By way of a quick recap, co-living was first announced in September/October 2017 by the Housing Minister and in March 2018, Eoghan Murphy changed the existing design standards as part of issuing the ‘new apartments guidelines'.

This was heralded as a response to millennial lifestyles and life choices, however, it may have limited impact on the housing shortage as both sales and rental stock persist in their under supply. Taking any emotive tone out of the conversation, the most recent CSO statistics shows a clear need for single-occupancy homes - this is more pronounced for social housing, according to social housing lists in most local authorities right now. This demand is at odds with the housing stock delivered over the past few decades.

We know that one-bed apartments are needed, legislative changes were made to provide for this, yet the general population is seem resistant to the idea of it. And just when we started to see the beginning of acceptance for one-bed homes, co-living emerged and this appears to be a step too far for many Irish people. As an industry, have we been getting this wrong?

Well according to the founder and CEO of a global co-living company we are. His company is not currently operating or looking to operate in the Irish marketplace and gave a rather damning interview to one of the Sunday newspapers at the weekend, explaining that co-living has been badly implemented in Ireland to date. He went on to say that the room sizes are too small and the shared facilities inadequate. On matters like this, we generally allow the market to speak, however, in this case it is fair to say that the market is, arguably, over a barrel as once the buildings are completed amending these design mistakes down the road may become financial impossibilities.

If co-living in Ireland is to work and stand the test of time, we should heed the lessons learned in other cities. Is there a need for such accommodation currently, yes. However, paying circa €1200-1600 for a small bedroom may seem much less appealing in a down turn even with funky common area furniture to boot.

Accommodation should be designed for longevity in any market, and provide value and a desirable place to live even if it is a short to medium term solution. If designed to provide quality accommodation and adequate common facilities for typically young people at a transient life stage, there will be a place for co-living at the property table in the longer term. However, if the design of co-living is inadequate, its run the risk of being seen in as a Celtic Phoenix fad in hindsight, when the next inevitable economic downturn happens in Ireland.

Co-living and also Co-working should be commended, as they certainly are innovative and interesting modern business models designed to meet the needs of a rapidly changing and evolving Ireland.

That said, the co-conversation is just getting started in my opinion.

By,

Laurence Hickey

E: [email protected]

Lotus Investment Group

Market Leader for Site, Construction and Property Investment Finance in Ireland.