DFI, an independent pan-European private equity real estate platform, has announced the forward funding of an £80 million gross development value, 200-bed co-living development in Kingston upon Thames, London, through an off-market transaction. London-focused developer Viewranks Estates will deliver the project for DFI under the agreement. The project has full planning permission and Gateway 2 approval, and it is located next to Kingston Train Station, a 30-minute train ride away from Central London.
Building amenities and target market
The eight-storey building will feature 200 en-suite studios at attractive rents that are inclusive of bills. Residents will have access to a master-chef-style kitchen and ground-floor co-working spaces. The monthly rent will include a leisure, catering and entertainment offer with a bar and restaurant, as well as a residents’ lounge, cinema, fitness studio, a communal terrace and a games room. Construction of the co-living building is expected to start imminently.
The area is experiencing significant undersupply of housing, with strong rental demand from young professionals and students, particularly recent university leavers just starting in their careers and working in London. Residential demand is supported by a strong local economy in Kingston, led by consumer, professional services and technology sectors, with Unilever having opened its new HQ campus in Kingston Town Centre earlier this year.
For many young professionals, the appeal of these developments lies in the balance they strike between the affordability of shared living and the convenience of having premium amenities included in a fixed monthly fee. Rather than managing multiple bills and subscriptions, residents pay one price that covers rent, utilities, gym access, and social spaces, which simplifies budgeting in a city where housing costs can vary significantly across different boroughs. This approach offers a stable living environment for those handling the complex UK planning setting.
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Market outlook and previous investments
DFI says it is working to create a bespoke lifestyle brand tailored to the target market and will continue to explore opportunities in this sector, with a focus on key locations within and in close commute to central London. The investment responds to a growing number of young adults and private renters driving demand for affordable, flexible housing in a market where co-living remains undersupplied, with only c. 7,000 operational beds across London.
This is a compelling, off-market opportunity to invest in a high-demand, undersupplied sector that is still evolving in London, under a defensive deal structure, Francesco Orofino, investment director and head of hospitality at DFI, said. We are working with best-in-class architects, designers and sector experts to create a flexible, branded residential experience that appeals to young professionals through ample amenities, living and working spaces, at rents that offer discount to comparable rental housing.
With only c. 7,000 co-living beds in the capital, we are bringing forward a high-quality, aspirational asset and one where we see real potential to replicate across the market, Orofino added. Gavin Neilan, founding partner at DFI, added that this latest investment builds on DFI’s strong track record of creating institutional-grade living assets across Europe where the firm focuses on assets supported by demand tailwinds, undersupply and operational expertise. This includes Blaekhus, a student accommodation platform comprising c. 1,200 student units, which DFI sold to PATRIZIA in 2022 for €314 million, as well as Mylo Living, a Danish flex living platform with a 350-unit asset in Copenhagen.
