Co-living Real Estate in Sweden: A new investment opportunity

Abstract: Co-living is a new modern tenure form that has emerged due to the current critical state of the Swedish residential housing market in larger cities, such as Stockholm. Moreover, the climate crisis has called for more sustainable solutions. The concept of sharing space is aligned with this ambition and is perceived as a sustainable way of living. The benefits and drawbacks of co-living from a resident’s point of view has been discussed in journal publications. However, there is a lack of research regarding this sub-category of real estate as a potential investment opportunity. Therefore, the aim of this academic report is to collect and analyze information from knowledgeable stakeholders, and systemize the findings regarding a co-living project. Vital core investment characteristics and factors are identified to create structure regarding investments in the development of this ambiguous product. Furthermore, the advantages and drawbacks of investing in co-living will be investigated and compared with conventional rental real estate investments. Moreover, the study will try to answer two research questions: - Are there any differences between investing in the development of conventional rental real estate and co-living spaces? - How are the key factors associated with investment analysis adjusted for this type of investment? The report aspires to: (1) fill the gap of knowledge in the research field, (2) study the prospective future, and (3) assess the possibilities and uncertainties associated with this potential investment asset. Given that this new field of research is only now unfolding, deductive qualitative methodology is adopted in order to uncover interesting material. Another reason is the lack of transactional data. It was found that the investment in co-living developments entails several differences compared to investments in conventional rental real estate. However, it is concluded that the co-living product is a valuable addition to real estate portfolios and generates several economic, societal and environmental benefits.