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September 12, 2019

In among Dubai’s high-rise apartments and low-rise townhouses, a new style of accommodation is springing up: co-living.

Following the likes of London and New York, Dubai’s young, expat heavy workforce coupled with a high cost of living is driving demand for these dynamic shared living spaces.

Co-living developments offer private apartments and communal facilities such as lounge and relaxation areas for a largely young professional crowd.

Projects like Collective, currently under construction in Dubai Hills Estate are purely residential, mixing one-and-two bedroom apartments with top-end shared leisure facilities, while the likes of UNA in Town Square also add co-working spaces into the mix.

“Whether it’s co-living or co-working, communal spaces create a greater sense of community and, of course, convenience,” says Dana Salbak, research associate for JLL MENA. “There’s generally a growing appreciation of schemes which allow people to interact and collaborate – particularly at a time of more urban living among young professionals.”

More than a third of Dubai’s population is aged between 22 and 36, and the vast majority are expats looking for high-quality accommodation close to work and leisure facilities.

“Amenities are an important part of the offer,” Salbak says. “It’s where co-living schemes can really set themselves apart from more traditional residential projects.”

As with other cities – like Singapore – where coliving has become popular, high local housing costs are driving demand for new developments in Dubai.

“For a young expat professional, the opportunity to rent or buy a small, centrally-located studio compares well with the less affordable options such as standard, one-bedroom apartments,” Salbak says. “It’s a viable and attractive alternative.”

Practically, co-living can also provide tenants with an alternative approach to rent payment. At present, rental payments are typically due on either an annual or quarterly basis. But co-living could shake that up.

“It’s a much more flexible option and could see a move to monthly, or even weekly rent,” Salbak says. “That’s currently very uncommon here right now.”

A growing sharing economy

The arrival of co-living is part of Dubai’s wider adoption of the sharing economy from transport services like Careem and Carpool Arabia offer ride-sharing to landlords advertising on Airbnb and platforms like Beehive connecting small investors with start-ups.

“The sharing economy is growing as a concept,” says Salbak. “In UAE, it’s behind the global trend but it will definitely grow, especially as cities like Dubai are keen to be part of the digital revolution.”

Growing numbers of locally-based entrepreneurs and businesses are also turning to co-working. The city has more than 50 co-working spaces – up by around 130 percent on 2015.

Plus, with recently implemented rules on freelance permits to encourage tech workers to move to the city, the government is hoping to attract more skilled international talent in the coming years – all of whom will need somewhere to live.

“As young expat professionals move to Dubai, the co-living model is likely to grow,” Salbak says.

As Dubai – and the UAE – see more co-living schemes built in the coming years, Salbak says the country’s major developers such as Emaar Properties are looking to bring the concept to the mainstream.

“These schemes will still sit within larger masterplans – of which the UAE is not short of – and as an integrated part of a wider living offer,” she says. “Developers think the demand for co-living is there and the demographics equally support this.”

Click to find out if private debt is set to shake up MENA’s commercial real estate market.

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Dana Salbak

research associate, JLL MENA

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