This article is from the Australian Property Journal archive
UKO expects to more than double its portfolio of co-living and build-to-rent apartments to more than 2,500 by the end of 2024 as supply in the nation’s overheated rental market continues to lag demand.
Part of Veriu Group, UKO has just partnered with Sasco Developments to open its 18th asset, in Sydney’s city fringe suburb of Alexandria, where 70% of the 69 studio and loft apartments were pre-leased ahead of completion and entirely full just a month after opening.
The building operates under a co-living model where customers have a private fully furnished apartment with utilities, high-speed wi-fi and access to a range of communal areas all included in the weekly rent. Communal areas include a kitchen, social lounge, co-working area and private meeting space, and an outdoor courtyard.
UKO is achieving a stabilised 98% occupancy rate for its Sydney assets and the demand is driving up rents. More than 1,000 apartments are reaching weekly rents between $700 to $1,500 for build-to-rent apartments, where room sizes range from 45 to 120 sqm, and co-living studios – ranging from 22 to 36 sqm, and which make up the bulk of its portfolio – are averaging $490 to $650.
Rental returns across the portfolio have increased by 20% post-COVID.
“We expect 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,” said Rhys Williams, co-founder at UKO.
The national vacancy rate is sitting at its lowest level since 2006, at 0.9%, according to SQM Research, while Sydney is at 3.1%. A major shortage of supply in build-to-sell apartments is set to hit the city over the next few years, according to Charter Keck Cramer, with apartment launches and completions hitting long-term lows.
UKO has several projects now under development in all major capital cities as well as regional centres.
“A wide cohort of renters have embraced the opportunity to adopt community living, much of which has been driven by the need for companionship.
“Demand for co-living continues to outstrip supply.”
The Alexandria project, named Industry, is Sasco Developments’ third project with UKO and a fourth will be located in Meadowbank with construction anticipated to start mid-2023. This project will be the first mixed-use building encompassing co-living with 162 co-living studios, 133 build-to-rent apartments and a retail centre.
Industry was designed by Mark Curzon when he was director at FK Architects and subsequently delivered by Curzon & Partners.
“The design concept draws its inspiration from the industrial past of Alexandria with its iconic rhythmic zinc saw tooth roofs that have been expressed as individual vertical elements, pivoted to orientate themselves to the expansive views and harvest the sun.”
Customers have access to the UKO app where they can place their profile for other renters to connect with them on a professional or personal basis, and community event details are also included on the app.
UKO is an operator specialising in property management for rental assets from 50 to 250 units held in one line by private developers, family offices and institutional investors.
