Co-living and build-to-rent (BTR) operator UKO has just opened its 18th Sydney asset in partnership with Sasco Developments at a time of peaking demands across the group’s portfolio.
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The group is reporting a stabilised occupancy rate of 98 per cent across its Sydney assets, which the latest offering in Alexandria will look to add to.
The group’s portfolio consists of over a thousand 45-120-square metre apartments where weekly rents range from $700 to $1,500 and co-living studios that set tenants back between $490 to $650 per week.
UKO’s co-founder Rhys Williams stated the group expects “demand to remain strong in the post-COVID environment driven by positive net migration and a significant undersupply of rental accommodation, which we do not expect to resolve in the medium term”.
He announced developments in other major capital cities and regional centres have already begun, with an expectation that the brand will grow its operation to 2,500 apartments by the end of 2024.
“The ability to provide a superior experience for customers and high returns for private developers, institutional investors and family offices has helped fuel the company’s growth. Rental returns across the portfolio have increased by 20 per cent post-COVID with occupancy rates reaching record highs,” Mr Williams said.
He believes the reason behind such a large, consistent uptake of the company’s properties is “the opportunity to adopt community living, much of which has been driven by the need for companionship”.
A primary example of the strength of demand for UKO’s apartments is the fact that the new Alexandria project, titled Industry, was 70 per cent pre-leased in the lead-up to its opening and is now 100 per cent occupied within a month of beginning operations.
“Demand for co-living continues to outstrip supply,” Mr Williams explained.
Joseph Sassine, Sasco Developments director, said that following the success of the Alexandria project — the third undertaken by the two companies — the duo has begun planning a fourth project, located in Meadowbank, “will be the first mixed-use building encompassing co-living with 162 co-living apartments, 133 BTR apartments, and a retail centre”.
UKO’s industry project is the latest in a line of public and private build-to-rent projects — such as ones initiated by the Victorian, ACT, and West Australian governments — instigated in an attempt to reduce housing pressures on tenants as vacancy rates across the country continue to plummet to record lows.
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