On the go: The Merseyside Pension Fund has allocated to a fund investing in co-living spaces, joining institutional investors including the Strathclyde Pension Fund.
Coliv, a fund managed by DTZ Investors with properties managed by The Collective, has attracted £170m in capital including leverage, and is seeking up to £480m more to build a portfolio of co-living properties with a target value of £1bn over four years.
Co-living ventures see ‘members’ rent private living spaces with communal amenities and bundled services such as cleaning and yoga classes. A building The Collective already operates in Canary Wharf fetches up to £148 a night for short-stay residents, although the venture is now offering up to four weeks rent-free to tenants moving in before October this year.
The fund stated that Merseyside’s commitment showed that the sector “has not been waylaid” by the Covid-19 pandemic, and that The Collective’s compatibility with social distancing while maintaining a sense of community has helped the business and customers stay resilient throughout the crisis. Coliv will target annualised returns between 8 and 10 per cent.
Talking up the fund’s “mission to deliver tangible social opportunities to the people it houses and the neighbourhoods where it invests”, Kate Fearnley, head of investor relations for Coliv at DTZ Investors, said the fund delivers a social impact by fighting London’s housing shortage and opening up buildings to community groups.
Ms Fearnley said: “The team at Merseyside shares our view, and that of The Collective, that it is incumbent on real estate investors and managers to have a positive impact on society while striving to achieve a strong risk-adjusted return.
“A further like-minded investor on board will galvanise the fund’s efforts to provide a housing solution that responds to renters’ demands for convenient accommodation, and society’s need for buildings and places that bring communities together.”
