Co-living development site sale evidence of strong buyer demand

22 April 2024

Demand for co-living development sites is on the rise, with one recent sale of a property in Sydney’s western suburbs providing evidence of this trend.

The site at 266 Railway Terrace in Guildford was sold within just seven days of being on the market for over $2 million to a local developer from Morehouse Investments following an Expressions of Interest (EOI) campaign run by Knight Frank agents Anthony Pirrottina, Demi Carigliano and Grant Bulpett of Knight Frank.

The 831.4sqm development site, which is situated within 350 metres of Guildford train station and retail village, has approval for 33 self-contained co-living studio apartments.

The development approval provides for three large common living areas within the co-living building, each with outdoor terraces and bathrooms, and a single-level basement car park for seven vehicles and three motorcycles, with a total gross floor area of 1,107sqm.

Mr. Pirrottina said the EOI campaign for the property resulted in 45 enquiries, and it was sold within just seven days of being on the market, demonstrating the strong demand for co-living development sites.

“We had significant enquiry from local developers looking to buy, build and rent out the entire building,” he said.

“This is off the back of near-zero vacancy in the smaller end of the market and rents having increased by more than 30 per cent over the past 12 months in Western Sydney, with comparable rentals in these markets have gone from $380 per week to $500 per week.

“We estimate there would be a gross passing income of at least $770,000 upon completion of the Guildford development.

“In addition, increased building regulations for traditional apartments is pushing smaller developers away from ‘build to sell’ stock and towards ‘build to rent’, which lowers the risk of claims associated with the 10-year warranty required for ‘build to sell’”.

Mr. Carigliano said the Guildford site was in a great location for co-living development in particular, being just 350 metres from the Guildford train station.

“266 Railway Terrace is positioned within the heart of Guildford retail village, a thriving hub located in Sydney’s sought after Western suburbs,” he said.

“It also has excellent access to Sydney’s key arterial road networks via the Hume Highway and the M4. “Located just 3.5 kilometres south of Parramatta CBD, Guildford is undergoing significant gentrification through mixed-used, residential and government backed development.”

The sale of the development site at 266 Railway Terrace comes as another co-living site hits the market in Sydney’s inner west, at 14 Dudley Street in Marrickville, almost directly across the road from the Dulwich Hill train station and light rail station.

The 430sq m site has development approval for 29 self-contained studio apartments, as well as three large common living areas, a rooftop courtyard and single level basement car park for eight vehicles, with approved total gross floor area of (insert).

Mr. Pirrottina said: “We expect the same trend to play out during the sale campaign for this Marrickville property as what we saw for the Guildford site at 266 Railway Terrace, with plenty of buyer demand anticipated.”

Rents in Marrickville are expected to be closer to $600 per week for a studio apartment, with an estimated gross income upon completion of the project of $1 million-plus.

The property at 14 Dudley Street is being taken to the market by Adam Droubi and Anthony Pirrottina of Knight Frank.