The coliving market - France

1.2 The growing European market

After a solid development of the coliving market in Asia and the American continent, coliving is now experiencing a craze in Europe.

According to the JLL Index, in ****, there were **,*** coliving spaces already built or under development.

The cities where this market is most developed are London and Amsterdam, which together account for **% of the European market. Next come Paris and Manchester, each with nearly **% of the market. Three quarters of the coliving spaces in Europe are concentrated in * cities : the four mentioned above, followed by Dublin, Vienna, Hamburg and Berlin. In total, there were coliving beds in ** European cities in ****.

The following table lists the top cities in Europe according to their advancement in the coliving sector:

Source: ****

1.2 The national market: a growth reservoir yet to be activated

A French market ready to grow

By the end of ****, there will be more than *,*** coliving spaces available in France, up from *,*** in ****, with nearly *,*** additional beds currently being planned. This supply is still relatively concentrated, with the Ile de France region accounting for about half of the French coliving market.

Like the European market, the French coliving market has strong growth potential, which market operators must nevertheless unlock. While the French coliving market is very promising, it is still in its early development. Some industry experts believe that the coliving market is just getting off the ground in France, lagging behind other countries (***).

The current obstacles to the development of the market are of several kinds:

*. Lack of knowledge and understanding of the coliving concept: the target population does not necessarily perceive the added value of the offer*. The legislative framework is not yet adapted to this new housing reality: for example, the diversity of residential leases does not yet include the possibility of coliving*. The complexity of financing real estate projects

Lack of awareness, the main obstacle to understanding the value proposition

Lack of awareness and understanding of the concept is the main obstacle to market development, but ...

1.3 Impact of the Covid-19 crisis

According to industry experts, the Covid-** crisis should have had a very positive impact on the market. Indeed, the rupture induced by the confinement and social news provoked a renewed interest for social link and community life. Young adults are increasingly attracted by the possibility of living together while maintaining their independence.

Moreover, the generalization of working from home reinforces this renewed desire: the social link created by the coliving community can be seen as an alternative to the social link between colleagues, threatened by the new standards of working at home.

1.4 Expert interviews

*. Benoît Jobert, The Babel Community

About the survey conducted in partnership with YouGov: what do you think of the data collected? Are you surprised by these results, especially by the proportion of young adults who have never heard of coliving?

I'm not surprised. Coliving is a relatively new term, and often perceived as a new way to talk about roommates.However, coliving is a new way of living that integrates collective spaces and services (***) not just on the scale of the apartment but on the scale of the building

What do you think of the target group chosen for our survey? (***)

I think the target is quite broad, because it includes both students and young professionals, and these are two quite distinct categories. At The Babel Community, for example, we mainly target young professionals.

Why target mainly young professionals and not students? Is it mainly a question of income?

Income is one factor, but not the only one. For example, we also offer coworking spaces in our buildings, an offer that is more geared towards a working class target. Finally, companies represent a strong rental pool for us: they can promote Babel to their employees who arrive for a short ...

2.1 Strong demand for housing in a tight real estate market

The growing difficulty of accessing housing in French metropolises

The French real estate market is becoming increasingly tense, making it considerably more difficult to access housing, especially in the metropolitan areas. This difficulty in accessing housing is due in particular to a strong increase in housing prices: these reached an index of ***.* in Q* ****, for a base of *** in ****. The index has been rising particularly since the start of the crisis, from ***.* in Q* **** to ***.* in Q* ****.

House price index France, ****-****, base *** Source: ****

In ****, the average rent in France increased by +*.*% compared to **** (***).

The tension in the real estate market is also illustrated by the number of requests for a single rental offer. In the main French cities, the number of requests for one offer can reach *.* in Angers, *.* in Lyon, or around * for Rennes and Bordeaux. note the absence of Paris from this top **, which was nevertheless present in **** and ****.

Number of requests for a housing offer, by city France, **** Source: ****

Strong demand for housing

Finally, the number of first-time buyers on the housing market is increasing every year, further increasing the intensity of demand. For example, between **** and ****, France had more than half a million first-time buyers on ...

2.2 The need for social ties

The growing need for social ties in France is another central factor in the demand for coliving. Indeed, French demographics are marked by a growing phenomenon of household breakdown, with a significant number of people living alone. The following graph shows that the proportion of men and women living alone has increased between **** and ****. Indeed, the share of women living alone in **** is **.*% (***).

We can also note that "small households", such as couples without children and single-parent families, are also more numerous in **** than in ****.

Household composition in France France, **** vs. ****, in % Source: ****

The share of the population living alone is particularly high from age ** onward with proportions that have changed little between **** and ****. Among younger populations, it is the **-** age group that is most affected by this phenomenon in **** with **.*% (***).

Share of the population living alone, by age category France, ****-****, in % Source: ****

2.3 A significant and growing need for shared services

One of the main added values of coliving facilities are the shared services. The latter are the subject of a significant and growing interest from the population in France. Among the most requested shared services, there are gyms (***).

The most requested shared services France, ****, in

In addition, a significant proportion of French people are willing to pay for these services, in particular childcare (***), are nevertheless services that a significant part of the population is willing to pay for.

Moreover, this proportion has slightly increased in * years, between **** and ****, for most of the services offered. This increase is most significant for shopping and home delivery services (***)

Willingness to pay for shared services France, **** - ****, in Source: ****

2.4 The main target of coliving: young adults and people in transition

Coliving, because it relies on social ties and a high degree of flexibility of supply, is mainly aimed at two targets: on the one hand, young active adults living alone, and on the other hand, people in a period of transition (***).

However, the main target remains the first category of population, namely young adults, mainly single and without children. Indeed, it is estimated that **% of the colivers are between ** and ** years old. [***]

Housing needs differ greatly according to these different population categories:

Students and young workers: medium-term needs, often from * months to * year (***). Other people in transition: shorter term need, transitional housing while looking for a more permanent solution

Regarding students, their population has been steadily increasing since ****, rising from *.* million to *.** million in ****, an increase of **.*% in less than ** years. An evolution that seems to be structural and will continue to grow. This increase is a growth lever for the sector.

Number of students in higher education France; **** - ****, in thousands Source: ****

3.1 Strong and dense external competition

There are many substitutes for coliving facilities, and these substitutes constitute de facto competition for the sector. The following table lists the competition to the coliving sector in * categories, direct competition and indirect competition (***).

The main competitor of coliving is the rental of a furnished apartment (***). On the other hand, traditional real estate, traditional hotels or social housing are only indirect or potential competition for coliving, since they target a different public and do not offer the shared services and provisions for "community living" that coliving advocates.

3.2 The main forces at work

We can distinguish two main types of actors in the coliving sector: investors and operators. The latter manage the operation of coliving establishments. Sometimes, investors and operators are confused, for example the Axis real estate group which owns the brand The Babel Community.

The following table ranks the main players in France:

To cite one of the latest financial operations happening on the market, *** million were for example invested in Colonies, a French coliving operator, by LBO, a French investment fund, in ****, with the aim of enabling Colonies to expand in Europe [***].

It is also interesting to note that traditional real estate players have also developed their own brands of coliving establishments in a logic of diversification of their assets. This is the case, for example, of Bouygues immobilier and its Kumkwat brand and Vinci Immobillier with Bikube, with the first sites scheduled to open in **** [***]. International players could also enter the French market, such as Urban Campus and Quarters. All of these new entrants, with significant financing capacities, could transform the French market in the coming years, which is currently dominated by operators who were the first to position themselves (***)

3.3 The main competing market: furnished apartment rentals

In spite of its structure of individual rooms in a common house, coliving does not face the competition of the colocation but of the rental of furnished apartments. Indeed, renting furnished apartments, like coliving, allows a certain comfort (***).

Competition from furnished rentals is currently very fierce: for the same budget and location, **% of **-** year olds (***).

Preference between furnished rental and coliving France, **.****, in % Source: ****

Preferred solution for moving in alone for less than a year France, **.****, in percent Source: ****

3.4 The second competing market: shared apartments

According to LocService, a specialist in the rental market, sharing a room is the most economical way to live, making this housing solution a direct competitor for coliving. The following graph shows the average monthly rent for a shared room, including utilities, in ****. While the national average is ***€, there are strong disparities depending on location (***).

Average rent for a shared room France, ****, in euros Source: ****

Paris is also the city where the demand/supply ratio is the highest for shared apartments. In fact, there is an average of *.* requests for one shared apartment. Then come the cities of Lyon (***) complete the top *.

Top * cities with the highest demand France, ****, in number of requests for a supply Source: ****

In addition, **% of roommate searches target the provinces, **% the Ile-de-France. Also, **% of searches concern one person. Those concerning two rooms account for only *% of searches.

The majority of the profiles of the candidates for shared apartments is made up of students (***). Retired people and people without any activity represent only *% of the candidates. It is therefore also because the target population of coliving establishments is similar to that of coliving applicants that this market is one of the main competitors of coliving.

Profile of ...

3.5 Interview with Maxime Sauvanet, founder of Les Pénates

Marine: Welcome to the Niche, the podcast that analyzes the niche market with the entrepreneurs who are moving the lines. I'm Marine and I work at Businesscoot, the startup that dusts off market research. Before we get started, subscribe to our podcast on Spotify and Apple Podcast. And now, let's get to the niche of the day the senior coliving market. And for that, I welcome Maxime Sauvanet, founder of Les Pénates. Hello Maxime.

Maxime : Hello Marine.

Marine: Thank you very much for accepting our invitation. We are absolutely delighted. Maxime, to begin with, can you present us in a few words what is Les pénates?

Maxime: Yes, Les pénates is a company that specializes in shared accommodation with services for independent seniors. In fact, it's quite simple, we acquire existing houses to be able to accommodate about ** people per house. The specificity of Les Pénates is that the houses we buy, we renovate them. But they are always located in the center of town, which allows our roommates to have easy access on foot to the various services, shops and amenities.

Marine: Very good. And so, you were born in ****. And you were telling me ambition ...

4.1 Social link and services: the focal points of the offer

In a housing market that has been very tight for several years, coliving has strong comparative advantages that are gradually emerging as a valid alternative. This is particularly true for services and the community dimension, which are the main advantages of coliving for young adults between ** and ** years old, the main target of coliving. The flexibility of the rental period or the administrative simplicity to access the accommodation are also part of the advantages of this type of offer.

What are the main advantages of coliving? France, **.****, as a % Source: ****

According to industry experts, this is even a necessary condition to belong to the coliving market. Among the many players currently communicating about this concept, only a few actually manage a community within their establishment. This is a central differentiation axis and a strong growth lever for the coliving market. We can estimate that the critical size is around *** residents. Beyond that, the population is too large and the community disappears. Conversely, at least ** residents are needed to create a community. Coliving actors therefore have a key role to play: that of community facilitator.

The other asset highlighted by this graph is the integrated services, such as housekeeping. While this element ...

4.2 Typology of the accommodation offer

The coliving industry offers various accommodation solutions, from shared rooms to studios or even apartments with several rooms:

Shared room: shared rooms accommodate between * and * people, are fully furnished and often equipped with a bathroom. This type of offer is not very common, but it allows to propose a very competitive rent. However, this solution does not offer any private space. Private (***) room: a furnished room, usually with a bathroom. As with shared rooms, the kitchen and other areas are shared. This is the most common and most requested option, as it offers both the comfort of independence and the opportunity to participate in the community. Studio or apartment: this type of offer allows for total independence if the student wishes, without the obligation to participate in community life. This is obviously the most expensive option, and it is relatively limited. It is sometimes present in some large coliving buildings that offer several options; in smaller colivings (***), this option is almost never present.

Private space per person

On average, the area per person in coliving is around ** m*. The median surface is ** m*, i.e. a private room accompanied, most of the time, by a private bathroom. This is the preferred ...

4.3 Coliving prices

As previously mentioned, the main competition for coliving comes not from shared apartments but rather from furnished rentals. As such, coliving prices are also comparable to those of furnished rentals. While prices vary widely from city to city or according to the level of services offered, it is estimated that the price of a single room is equivalent to that of a furnished T*-T* in the same city.

Source: ****

For example, the coliving group La Casa offers the following comparison chart:

Source: ****

The following prices are given as an indication from the sites of the sector's players:

Source: ****

5.1 A still limited and restrictive legislative framework

Because of its hybrid status between colocation, furnished rental and services inherited from the hotel industry, coliving is still subject to a vague regulatory framework. Indeed, the concept does not correspond to the framework of the hotel industry, nor to the framework of the residential sector. This vagueness creates uncertainty on several levels:

What regulations should be applied for construction? What regulations should be applied in terms of urban planning? What form of contract should be offered to future clients?

The types of leases that can be considered are numerous: classic lease for the main residence, seasonal rental, mobility lease...

However, a dwelling inhabited more than * months by a person becomes obligatorily his principal residence. This individual can then claim housing assistance benefits for this accommodation, and the operator is obliged to control the rent. The implications of the principal residence lease are numerous: minimum duration of the lease, duration of notice, etc...

Source: ****

Here is a summary table of the different types of leases that can be considered, as well as their advantages and disadvantages:

6.1 Segmentation of the players present on the French coliving market

• Axis - The Babel Community
• Bouygues Immobilier
• Vinci Immobilier
• UKIO
• Kley groupe
• Colonies
• La Casa Coliving
• Cardinal Groupe
• Woodeum (Altarea)
• La Roche Cotard Coliving
• Hife Coliving
• Coliving.com
• Château Coliving
• Dovevivo
• Uxco Group
• Ecla (Uxco Group)
• Habyt Common
• Sharies Coliving
• Tendoors Coliving
• The Boost Society
• Harvey Coliving
• Cowool
• Appart’City