Are a sizable portion of newly arrived residents in Dubai choosing to rent co-living spaces? particularly if they are in their 20s or early 30s and are still gaining experience in new roles or endeavors they have undertaken.
According to market sources, co-living rental spaces are becoming more prevalent in listings, and the actual lease rates also appear to be stabilizing.
“When I search across Dubai, the last one came back with 3,500 (co-living) rooms (listed),” said Danielle Hall, founder of Co-Living Legends, which works closely with developers and landlords to lease and manage such rentals.
“If one goes online to search for a room to rent in say, the Dubai Marina, you will find hundreds of options. These range from individuals offering a room in their own homes, friendship groups or colleagues already house-sharing and who need a third or fourth housemate.
“However, established companies with a proper model – like Co-Living Legends – are still few, especially compared to cities like London or Berlin, for example. The need and demand are there, but the providers are still fairly small in number.”
According to industry sources, the co-living space would add another 3,000–5,000 rooms in “no time at all” if the current levels of demand continue.
How much are co-living rents going for?
It’s telling that Danielle brought up Berlin or London. Consider co-living as an improved alternative to dorm living for students but with clear regulations of its own. In terms of Dubai’s real estate market, it also means a greater variety of rental choices in the city, which is currently witnessing a notable increase in the number of inhabitants as more people choose to make it their home or place of residence. According to some industry observers, the co-living rental submarket in Dubai is currently at the same stage as short-term rentals were roughly five to six years ago.
Current co-living room rentals for a month start at Dh4,000 and up, according to listings. and premium options priced over Dh6,000. (Clearly, people looking for co-living spaces in Dubai are choosing convenience and lifestyle over affordability.)
According to Hamza Abu Zannad, co-founder at Axiom Prime Development, the market has already turned for co-living in Dubai. “This has become most sought after by new expats,” he said. “An investor, purchasing a two-bedroom plus maid apartment and optimizing it for a shared living can tap into high-yielding and secure premium rentals. Especially as extra rooms – even the maid’s quarters – fetches the highest returns.”
Another opportunity for landlords?
In Dubai, rentals continue to rise overall, and the most recent update to the RERA Rental Index has given landlords even more opportunities. Additionally, a few of them are investigating the possibility of earning returns above the market average through co-leasing.
“Co-living is often misconstrued as bed spaces and creating overcrowding,” said Danielle. “Which it definitely isn’t. At our units, no bedroom is occupied by more than one person. A 3-bedroom hall kitchen is for three people and so on.
“I think more developers and landlords need educating about what co-living actually is. We prefer all of our bedrooms to have an en-suite and to have their own AC control. Many buildings in the city don’t always have such options.”
Who’s leasing these co-living spaces?
“Those from clusters of similar industries such as realtors, legal and marketing execs, events planners, online business entrepreneurs, etc.” added Danielle. “We also have companies approach us to house small groups of their staff.”
Leasing to corporate clients for relatively junior staff members who are in the UAE for short periods could be another growth area that landlords want to consider. Additionally, the co-living spaces’ normal leases range from six months to a year.
Landlords have the upper hand in this market. They have the option to rent out their apartments for a year, for a shorter period as vacation homes, or co-living. Additionally, each one is capable of providing the ideal returns that they seek.