Emerging living concepts – the Polish housing market in the face of European trends
The Polish residential real estate sector, like other European markets, is facing several challenges resulting from dynamic price changes, demographics, urbanisation and evolving user preferences. ULI’s Poland Places + Spaces series within the Fabryka Norblina Centre in Warsaw spotlighted a pressing issue within the residential sector titled ‘Emerging Living Concepts’. During the event, participants were presented with insights and engaged in discussions about the profound transformations in living formats, which have been influenced by demographic shifts, environmental considerations, and various challenges in recent years.
The conference was introduced by Marcin Juszczyk, the chair of ULI Poland, who, while admitting that the shared living market in Poland is still in its infancy, drew our attention to the statistic that 8 of 20 of the asset classes of most interest to investors are sub-segments of the residential market. And so, to discuss the best practices, benchmarks and trends of these sub-segments, he introduced the first speaker, Thomas Beyerle, managing director of Catella Property Valuation GmbH and head of research for the Catella Group.
The battle of the generations
His main theme was the battle for living space between so-called Baby Boomers and Generations Y and Z and the impact this has been having on the housing market. While taking a few of the stereotypes associated with these demographic groups with a pinch of salt, he did point out that the average age for having a first child has been shifting upwards to about 32 in Western societies – according to the principle that the wealthier a society is, the less inclined it is to reproduce.
As the Baby Boomers enter retirement, this has led to there being a greater proportion of elderly people compared to younger generations. In fact, in the biggest 50 European cities, more than 50 percent of households are now one-person. This, along with the different lifestyles and working styles favoured by younger professionals, is of course what has been shaping the current residential market. But it has also fueled the stereotype that Generations Y and Z are just renters who don’t invest in owning their own homes. Nevertheless, he also highlighted the fact that at the moment: “Countries with a higher proportion of rental apartments also have a higher transaction activity,” But the question for market players, is whether these younger generations will move out of their rented apartments once they eventually have kids and go to live in the suburbs?
For the Baby Boomers, on the other hand, once their offspring have flown the nest, they can end up living in large houses with too many rooms.
Will they then decide to sell their homes on the outskirts and buy a smaller inner-city apartment instead? All of this will continue to drive the dynamics of the residential market into the future, but as Thomas Beyerle emphasised, it will also keep on driving house prices up – and this is certainly the case in our part of the world. The best yields across Europe are to be found in Riga and Vilnius at around 5.25 percent, followed by Kraków and Wrocław with 5 percent, while the lowest are in Stockholm (1.2 percent). He also pointed out that according to an annual survey of 250 European real estate investors, 78 percent said that this year they would be strongly focused on residential, while the next two most favoured asset classes were logistics/industrial (51 percent) and office (40 percent).
Are we experienced?
The second speaker of the conference was Gui Perdrix, the president of the global coliving association CoLiv and the co-founder of the coliving incubator Art of Co, and, as such, he began by defining exactly what coliving is: “More than two unrelated people living in the same space and sharing common resources, for instance, a kitchen, a living room.” Examples include types of student and senior accommodation and standard flat-sharing. Typically, the rent and bills are paid in one all-inclusive payment. Also, this format is characterised by its flexibility, as contracts can be signed and terminated quickly, sometimes under a subscription model. But one key feature of coliving is that there should be a strong community focus together with an ‘urban lifestyle’ – the ‘housing as experience’ concept. But as Gui Perdrix admitted, while this is true in theory, it is sometimes not the case in practice.
In any case, coliving needs to be distinguished from serviced apartments, which do not come with common space, and which don’t have the same flexibility, or the same community and urban lifestyle focus. Delving further into the various forms of coliving, it includes standard flats shared by 4 to 6 people, larger house-style buildings with 17 to 18 people, larger retrofit buildings for 25 to 80 people, and (since 2017) the huge developments we have been seeing, which can accommodate anything from 80 to even more than 500 residents. While each type comes with a range of amenities, the huge new projects have the most extensive range, such as coworking and library space, gyms, laundries, cinemas, canteens, event space, rooftop zones, gardens and BBQ areas. Since 2017, the number of coliving professionals has shot up almost ten-fold, while the number of coliving brands has also seen exponential growth: from 120 brands in 2016 to 1,700+ last year.
Another aspect that Gui Perdrix touched on is that different co-living cultures depend on the country or even the city. From his experience, the New York coliving scene was notable for its many asset-light operators who wanted to grow very fast, but in Los Angeles coliving is smaller, cheaper and often features the leasing of pods, while San Francisco, with its history of communes, is marked by a more grass-roots, bottom-up approach. The culture in Amsterdam, where the populace of the city seems very keen to embrace co-living, is mainly characterised by it hardly having any supply of it due to the legal obstacles in the way of such developments.
Another interesting feature about the current market is that it seems to be divided into asset-light and asset-heavy because more and more traditional developers are entering the game. The asset-light approach is exemplified by the tendency of some of these developers to turn to specialist white-label operators rather than managing the properties themselves. The growth of some of the players in the market has also been staggering during its short history. For example, LA-based Node started in 2018 by offering shared living in houses, and by 2020 was providing boutique coliving apartments; but now, in 2024, it is developing 707 apartments in two huge projects in Madrid. Such examples abound and demonstrate just how mature the market is becoming. French company Cowool, which was founded in 2022, is another. It specialises in hybrid formats, combining hotels, coworking and coliving. It started by converting old hotels into such facilities and now has four standing locations and four in the pipeline.
Typically, these buildings will have around 5,000 sqm of space, divided into 1,500 sqm of coworking, 500 sqm of services, and 3,000 sqm of residential – 20 percent of which is short-stay.
Corporates and nomads
Other formats on the market are being tailored to specific groups that have emerged in recent years, such as remote workers or digital nomads, but it’s important not to dismiss their potential as long-term clients – as Gui Perdrix pointed out, they are not tourists but are entrepreneurs and freelancers who can eventually decide to stay for the longer-term. There is also interest-based living, centred around, for instance, music studios, sports or specific cultures (micro-cultural residences).
Another market niche with a high level of demand is that of the young/active seniors – those of retirement age who are nonetheless still very fit and active. And then there is the corporate segment, or ‘flex-living’, which came into vogue with the advent of the home office and hybrid working styles. If a company now requires employees who live, say, 100 km from the office, to come into work 2-3 days a week then they increasingly need to be able to book such accommodation on these days. Through this kind of flex-living, remote workers are given the opportunity for some much-needed regular interaction with their work colleagues, while some giant companies, such as Apple, are now considering developing their flex-living residences.
Gui Perdrix concluded by mining his extensive experience to offer some advice to coliving developers and operators, based on some of the common mistakes that have been made in this nascent market. This included getting the affordability right, not relying too much on technology, providing smaller areas conducive for closer bonding, having a longer-term focus (maybe 5 to 10-year stays rather than the one-year contracts that are still the norm?), and co-ownership options for tenants. But above all, he stressed, the most important thing for coliving developers and operators to get right is “to create an experience across the entire residential journey” – from the time the resident discovers the space, through the interview stage to find out whether the concept suits them, to integrating into their new community and finally feeling at home (a process known as ‘onboarding’). As he told us, if a new resident makes 2 or 3 new friends in their first week, they are 50 percent more likely to extend their leases.
The meaning of living
The final presentation was given by Andrei Martin, a partner at London-based studio PLP Architecture and a founding partner of PLP Labs, which specialise in researching into and designing large-scale urban ecosystems – or what are known as micro-cities – and are mainly involved in the refurbishment and repositioning of buildings within this context. The question he posed is that if it is in the human condition to yearn for meaning, have the meanings of our dwellings been lost due to the mass production of housing? To show how such meaning can be rediscovered, he detailed a few notable micro-cultural residences, such as Wembley Park in London, which even attracted the Royal Philharmonic Orchestra to move there, as well as East Village in the same city, a community centred around the visual arts and handicrafts, or a recent student housing scheme in the City of London with its own Migrant Museum that tells the background stories of many of its inhabitants.
Another way that meaning is being added to our homes is through lifestyle brands entering the market, such as fashion brand Diesel, retailer John Lewis and several restaurant chains, each adding an accent of their own business to their build-to-rent homes. The idea is to interweave the narratives of the brands into these apartments, to elicit the specific emotions associated with them. A third way of bringing meaning back is to ensure the adaptability of the living space – and this has become especially relevant since the pandemic. A home now needs to be multifunctional, capable of hosting different roles within the same space – so it should work as a home office, a home cinema, a home café, a home library, a home farm, a home workshop and a home gym. For coliving, where space can be at a premium, much consideration needs to be given to how this can be accomplished.
His final theme was multigenerational living. He noted that the concept promotes the creation of spaces that support intergenerational interaction and community building. Multigenerational housing can offer flexible spatial solutions, common areas for meetings and activities, and adapted services that facilitate daily life and strengthen social bonds. Adaptive space design supports a diversity of housing functions, responding to the changing needs of residents at different stages of life.
Over to the panel
His final theme was multigenerational living. This was also discussed a length in the panel discussion that followed, moderated by Dorota Wysokińska-Kuzdra, a senior partner at Colliers and an executive committee member of ULI Poland. The panellists included Andrei Martin and Thomas Beyerle, along with Marta Karteczka, the head of serviced living of NREP in Poland, and Marcin Wyszomierski, the CEO of senior homes specialist Proaltum, who stressed that it wasn’t just demographic change that is driving the coliving market but also population growth. Prices are only going to keep going up as the population of the world expands.
Micro-apartments and coliving could thus be the answer going into the future to not just the availability of housing but its very affordability. Our longer lifespans and susceptibility to ageing conditions also present new challenges for the assisted living sector, which Marcin Wyszomierski believes can only be served by much larger senior homes than are currently permitted under Polish law.
The panel agreed that multigenerational living, rather than generational segregation, is the optimal solution, as it makes older people feel younger and encourages youngsters to be more level-headed – but the market hasn’t got around to providing this yet, so this is still a concept for the future. One of the questions from the audience to each panellist was: What would they do differently five years ago knowing what they now know? Marta Karteczka of NREP, responsible for Noli Studios, which is one of the first in Poland to offer a wide range of differently-tailored coliving space, replied that five years ago she would have quit the job that she then had in the hotel trade and started working in coliving sooner, as this is a much more interesting and dynamic and market to work in. And from all the topics covered at the conference, it certainly seems that there are going to be many more exciting years ahead of it.
