Co-Living Pioneers Seek Partner To Build £1B Pipeline
Co-living developer and operator Re:shape is seeking a funding partner to build out its pipeline of almost 2,000 beds in and around London after buying three sites in the space of five weeks, Bisnow can reveal.
The company, led by founders Jermaine Browne and Charlie Gayner, have bought sites in Woolwich in south east London, Bethnal Green in east London and in Watford, to the north of London. The combined properties, along with other potential sites on Re:shape's radar, form the cornerstone of a £1B development pipeline.
The sites were bought in joint ventures with various family offices, and Re:shape is now looking to bring in an institutional investor to forward-fund the build-out of the schemes, combined one of the largest living-sector deals on the market in the UK.
“It’s hard for funds to enter the co-living sector and deploy meaningful capital,” Gayner told Bisnow. “It’s an embryonic sector, with lots of smaller developers, few of whom have scale. But bigger funds want to deploy larger amounts of capital, and so we’ve been focusing on how we can aggregate sites and create a platform with scale.”
Browne and Gayner are alumni of The Collective, the UK’s first significant co-living developer and investor, and they set up Re:shape in 2020. The company teamed with private equity firm Crosstree to convert a hotel in Wembley to a 300-bed co-living scheme operated under Re:shape’s Ark brand.
At the beginning of this year, the Ark brand also took over the management of the 705-bed former Collective co-living scheme in Canary Wharf that Crosstree bought for £190M in 2022. The Collective went into administration in September 2021.
Now Re:shape is looking to extend its ethos of what Browne called “second-generation” co-living to ground-up developments as well as hotel conversions and preexisting schemes.
“We want to focus on creating housing supply to help what is a genuine housing crisis,” Browne said. “Over the last few years, new supply coming forward has slowed because of the financial conditions for developers.”
The Ark schemes at Wembley and Canary Wharf are fully leased, giving Re:shape the confidence to build up a larger pipeline, Browne said. The company offers free accommodation to victims of domestic violence at its schemes when it does have vacancies.
After working on deals for almost a year, Re:shape closed transactions to acquire three sites in five weeks at the end of 2023.
In Woolwich, it already owned a site with the potential for a 300-bed student scheme, and it has a deal to buy a larger site previously controlled by L&G that gives it the potential for a 1,200-bed project. That would be split between roughly 450 co-living beds and 750 student beds, with 100 of the units to be affordable.
The student element of the scheme would likely be sold off to keep the wider platform a pure-co-living play, Browne and Gayner said.
In Bethnal Green, it has bought a site with potential for 220 co-living beds, and in Watford, it purchased a site located next to the town's train station with potential for 300 beds.
Together, the schemes represent a pipeline of 1,750 beds with a gross development value of around £885M. Re:shape also has its eye on other sites, including a hotel conversion that would take the pipeline to 2,000 beds and £1B. Any funding partner would also have access to future deals.
Browne said the company’s schemes are affordable to renters in that they are typically at least 25% to 30% cheaper than new-build build-to-rent projects in the same locations.
Bisnow is holding its UK Co-Living Summit in London on 23 April, which last year was attended by more than 200 people. To attend this year’s event, go here.
