One the world's fastest-growing co-living brands has secured a mammoth €1 billion (AU$1.5bn) investment agreement to bolster its European portfolio.
Quarters, part of Berlin-based co-living service provider Medici Living Group, targets young professionals and offers a residential and living experience “aligned with the needs of millennials”.
Frankfurt Stock Exchange-listed real estate investment manager Corestate Capital Holding has invested €1 billion (AUD$1.5 billion) of equity and debt in the co-living sector.
The equity and debt investment will go toward the acquisition development and management of 35 co-living properties providing up to 6,000 units in countries including Germany, the UK, the Netherlands, Austria, Switzerland, Spain and Poland.
Corestate will handle the financing and project development while Medici will design and operate the buildings under its Quarters brand.
“Urbanisation, young people’s desire for community as well as the opportunity to live and work in different cities, are boosting demand for communal residential space,” Corestate chief executive Michael Butter said.
“Investment in the co-living segment is characterised by the low risk profile of residential property paired, however, with higher yield expectations.”
Founded in 2012, Medici currently has about 1,800 rooms worldwide, 97 per cent of which are occupied.
Members get their own bedrooms and access to communal kitchens, bathrooms and living areas.
“This investment is a breakthrough for the co-living sector worldwide,” Medici Living Group chief executive Gunther Schmidt said.
“The co-living sector has enormous potential, even greater than the co-working sector, and our European investment program presents a playbook for our growth plans in the U.S. and other markets.
“We are building the WeWork of co-living.”
Medici and Corestate will focus their expansion on cities with more than 500,000 inhabitants and on existing and new properties requiring an investment of between $30 million and $90 million.
Medici is also working to raise funds for an American expansion planned for next year.