How maximising space can maximise returns

The managing director also believes investors can win through this living arrangement, with co-living providing attractive yields to the investor, with units in Melbourne being rented out for $300-$350 a week, including bills.

“Most importantly, they are proving to be a very attractive income-generating asset from an investment perspective, with average returns of around 14 per cent at this point,” Mr Bevacqua said.

Mr Bevacqua believes the co-living arrangements can help bridge the gap in the market as build-to-rent struggles to catch on in Australia.

“Build-to-rent has been slower to take off in the Australian market, mainly through the length of time it takes to see any decent return. We don’t have those challenges with the Studio Home concept,” Mr Bevacqua said.

Instead, the property investor highlighted the lower risks and cost associated with the sector.

“There is no planning permission required, so therefore no planning risk (under the building classification), while the build cost is generally lower than commercial rates, with an average eight to 12-month build duration,” Mr Bevacqua continued.

Finally, Mr Bevacqua said the industry needs to look at co-living differently as it varies from anything else currently in the market.

“High-volume, high-density developments are the norm in this market, and so it seems that build-to-rent is only viewed through that lens, which is not a very innovative way to look at it. It’s a completely different investment proposition,” Mr Bevacqua concluded.

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