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For consumer examples and details of the first candidate development locality please refer to our public crowdfunding proposition.
- targeting remote workers and location-independent professionals (digital nomads), representing emergent segments having strong growth potential, both independent and to enterprises
- offer of flexible mid-term destinational live-work space (coworking+coliving)
- multi-stakeholder model, can be split between fractional ownership with membership, and rentals business paying dividends on preference shares (target/capped yields at ~9%)
- fractional stakes raised through crowdfunding, can reduce capital requirements and/or offer flexible asset-release; user-ownership also increases community engagement
- people-oriented rather than place-oriented, allowing the leverage of lower cost property in lower demand locations for regeneration, and resulting in a high proportion of return visitors and informal referrals
- impact-oriented, committing a proportion of both revenue and community time towards collectively chosen causes for longer-term engagement and participation
- on average 30% cheaper market rental offering (€400–800/month) versus other operators, and with significant advantages as purpose designed spaces
- changing job market with ever growing number of freelancers and remote-workers
- desire of city-dwellers to visit and reconnect with countryside
- digital nomads whom move from location to location as a lifestyle
- regeneration of rural areas due to population migration
- coworking — massive growth of shared work environments, promoting collaboration
- coliving — impending explosion of shared living-as-a-service
- inevitable merger of coworking and coliving as combined live-work hubs
- increasing need to counter the issues of social isolation and mobility through community
- guest appeal is foremost the space, its community and affordability, far less the location
- stays of 14–90 days (mid-term) thus providing reliable revenue with less unused capacity and overheads (albeit at the cost of reduced rates)
- does not target traditional variable occupancy (short-term) tourism segment (yet may still employ, maximising upon peak season rates and reducing vacancies)
- significantly reduced labour commitments (staff and redevelopment) using work exchange programs and traded for accommodation
- community-orientated, fostering a sense of belonging amongst guests resulting in frequent return stays
- reduced marketing from low churn, small customer base with strong growth through word-of-mouth
- maximised common spaces increase value at a rate on-par with longer-term rentals
- may accommodate events and team retreats which represent a segment with significant growth as companies make their teams remote
- winter discount with community residency programmes optimises utilisation during the harder to fill period, whilst providing an extremely appealing offer further building awareness
- Coliving Hubs
Mid-term stays in larger properties purpose designed for coliving and coworking. These are our primary focus and provide getaways within dynamic communities.
- Coliving Satellites
Shorter stays in smaller properties focussed around local activities, and potentially access to metros (e.g. <1h30 transit). These complement hubs by offerings small more focussed spaces.
Permanent use, as individual units/microstudios, integrated with a hub. In addition to a strong existing segment of buyers looking to leave cities but not wishing to loose connection to a dynamic community, this also represents a future conversion path for users of the prior offerings as they move on in their lives.
- Ad-hoc rentals
This capacity is held as preference shares by investors seeking dividends from the revenue, or may be held by impact-oriented entities such as a municipally owned property. Any surplus above dividends is reinvested into the community to bolster appeal and engagement.
- Fractional ownership
Purchase of capacity as shares by users, giving reduced use costs (versus rental) for that stake. Non-use is tradable but would generally be structured to avoid revenue generation in order to ensure community cohesion.
- Unit ownership
Sale of individual units for permanent use, but which if unused pay rental revenue to an owner after deduction of operational fees. Sales may be discounted in advance of project commencement to raise its capital.
Our model utilises a mix of these, which given a property's capacity and its stakeholder's expectations, the correspondence between allocations is adjusted. We are not however currently considering majority rental operations (>50%).
The larger the preference/rental allocation, the longer it may take to reach target dividend payments as market demand must grow to fill the corresponding rental capacity; this may however be offset with an increased marketing budget. In future once the community is established, this would not be an issue.
[we] foresee that one should be able to buy into a community-like neighbourhood in the future, sharing the financial costs, but also sharing the potential gain […] you could be the co-owner of a larger space, while only using a small piece of it privately, challenging the very definition of home ownership as we know it today— An Educated Guess About the Future of Real Estate (Partech, Daphni)
Much as coworking gave rise to community-based workspaces, coliving is doing the same for living spaces—both leverage and create benefits from their superior shared facilities, often at a lower individual cost than equivalent traditional approaches, and without long-term commitments.
Remote and location-independent work is ever growing and likely to reach a significant majority of the workforce in the coming decades. Online work frees many from the typical single-location approaches to both living and working, thus resulting in their needs being considered together for lifestyle 'geoarbitrage'—the selection of more affordable and novel locations serving work-life balance. These location-independent professionals are often termed 'digital nomads' although the segment includes many other classes of work other than online, such as fitness and wellbeing.
Such professionals thus seek locations from which they can both live and work for the mid-term, whether they do it in new location on an ongoing basis, or only as a retreat from their usual base, yet always with the purpose of connecting within communities around the world.
These hubs can also have local community impact, by virtue of drawing outside experience and knowledge to its locality and opening up opportunities between these 'remote' guests and locals also utilising the space, through ad-hoc and serendipitous exchanges, talks, workshops, and other programmes.
Despite this growing demographic such spaces are presently emergent (a few dozen) and equally split between multi-location brands or immensely varied independent 'lifestyle' operators. It is thus difficult to find trusted spaces to stay and use as a supportive base for work, from amongst these choices. Many potential guests and residents attempt to find apartment and room sublets, or pay the premium for booking on AirBnB. Both of which typically also require signing up for a separate coworking space.
- community-orientated space with like-minded creative and entrepreneurial guests
- choice of rooms with multiple room classes from pods (modern dormitory) to studios appealing across customer segments (many spaces offer rooms only with shared bathrooms)
- more affordable for longer stays (many spaces don't have seasonal or long-stay reductions)
- large and varied shared living and work spaces providing both quiet and active environments alike (many spaces struggle to divide spaces up suitably)
- staffed with possibility of meals provided (very few operators offer this)
- ergonomic workspace with reliable internet (many operators lack experience with workspace design)
- (unguided) fitness and outdoor activities (hiking, biking, riding, kayaking) plus day trips to neighbouring sites and cities (most operators focus only on accommodation, not wider needs)
Targeting 10 properties in 10 years with a valuation at €12m, from profits of €0.6m+/year, and funding of €2.5m. This timeframe could be reduced by bringing onboard an additional cofounder for field management of simultaneous properties during their development.
As demand increases the brand and its reputation can expand with a network of similar locations, to a much greater extent than competitors, utilising our low-overhead model that enables expansion without the significantly higher costs of metro operators (yet with the disadvantage of slower growth).
As the targeted professionals tend to move from one such space directly to their next there is a strong opportunity to leverage a network of spaces, maintaining the customer relationship throughout their journeys. There also exists a strategic opportunity with residential coliving operators in cities as a 'retreat' partner.
All these properties do however need extensive work and time to locate for a similar proposition. The model itself can be adapted to more expensive properties such as those in large towns and to new build, which would add variety within a network of locations and further strengthen customer loyalty. Or capital may be increased to reduce the time to market.
There would be no intention to operate at the higher market level to compete with other multi-location operators, thus prime city properties would not be considered unless subsidised by local government under redevelopment programmes, or should demand from an expanded customer base warrant locations in second-tier locations which present potential whilst being accessible to primary metros.
There also exists potential in some locations to develop properties with a focus on permanent residential coliving.
As such real-estate models are asset-heavy, significant capitalisation remains in the properties themselves. We foresee a growing desire to own such facilities by the users themselves and as such expect to be able to sell fractional ownership across the network of properties, alongside permanent units in the form of 'cohousing'. This would thus enable locked up capital to be returned to investors, or for reinvestment in expansion.
- 4.8 million Americans described themselves as digital nomads 🔗
- among traditional U.S. workers, 11% said they planned to become digital nomads 🔗
- 43% of employed Americans spent at least some time working remotely 🔗
- 21-33 million remote workers in the US could become digital nomads (~20% of the labor force)
- extending this to other similarly developed countries gives a current potential market size of 99 million (excludes Asia) 🔗
- 1 billion digital nomads by 2035 🔗 (sorely mis-defined)
Operators target this segment with differing models. The first is not in direct competition and may even be clients for larger properties, these are the event-oriented operators (popup/ad-hoc, and subscription) from cruises several times a year (taking 400+ attendees), through year-long programmes that take their participants around the world every month (Remote Year having received 200,000 applicants, for programmes accommodating only 80) to popup villas for a couple of months (AirBnB's free 3-month remote-work sabbatical had 40,000 applicants in 48h).
The preponderant model is property operators, whom span a vast array from small apartments with only a couple of bedrooms through to repurposed hotels functioning as higher-end hubs. These are split between 'residential' long-term operators typically in major metros, and the 'destinational' short-term operators in vacation spots.
Our target is mid-season mid-term rentals at rates lower than typical metros and holiday stays. Employing significant seasonal pricing variation we create an opportunity to differentiate for those whom are more flexible whilst ensuring revenue across seasons. Most mid-market operators lack equivalence in specification, but do generally have superior locations (islands and cities versus semi-rural), we therefore position our ensuite rooms against their standard rooms and undercut by around 30%.
Some of the independent properties have strong dynamic communities and charge a corresponding premium for this, whilst the larger multi-location brands due to their scale and costs don't invest into their communities in the same way, leaving the proposition primarily focussed around their facilities. We plan to only use properties that support suitably sized communities, enabling us to scale whilst maintaining community, in this manner we may latterly increase our rates to further leverage this combination.
A semi-rural property makes for an accessible yet natural location. Whilst most other operators are in cities, with a mid-market price-point we offer ensuite rooms and an interesting countryside environment for balance. Such locations appeals to the demographic of city-based workers (now the vast majority of the world's population) whom seek to reconnect with the countryside, and can take their work with them for workations, but are sufficiently adventurous for a remote immersion.
Demand for more rural locations can but increase as fewer and fewer people have connections to the natural world, making opportunities to live and participate in rural activities desirable, providing it doesn't lack expected comforts and facilities.
Our rates versus other operators ensure that our offer is much more competitive for longer stays, providing increased revenue reliability. Furthermore the offer spans customer segments from budget to premium, accommodating many guest profiles under the one roof.
During an awareness building phase the rates will be further reduced, and latterly increased as market demand continues to grow. The rate brackets will be adapted per demand and to balance against potential revenue from secondary targets such as nightly tourism guests (B&B) during peak season.
Whilst metro-operators have great difficulty finding suitable properties, scouting more rural and suburban locations yields wide variety. Nonetheless those that are compatible with the model are generally buildings historically built as open plan factories yet retaining a local style, rather than more impressive chateaus and historic homes which are difficult to repurpose.
Industrial buildings are cheap to acquire but demand labour in order to redevelop. They exist within non-prime towns and villages improving the proposition versus entirely rural locations. Good internet is the second most important criteria and is rarely available outside towns. (In coming years this will not be an issue as low-orbit satellite internet becomes available.)
Due to the size of the market and its growth, and the tendency of customers to travel from one space to another, we do not consider other operators as direct competition. Each new operator increases awareness within the market and each has its own unique offer. To leverage this we are working to establish a shared identity and marketing efforts to reach our guests and residents.
Providing value through being a community-orientated hub requires that a space have certain optimal capacities, therefore we exclude both smaller and larger operators from comparison. (Offerings with 3 or 600 units are clearly of a different scope than an optimal community having 12–24 units.)
Roam: higher-end (5 locations: SF, London, Miami, Bali,…) from €1500; Bali location transferred to Outpost
- Outpost higher-end (3 locations: Asia,…) from €2100 (Bali)
- Akora higher-end (1 location: Madrid, expanding in Spain/Portugal); from €1700
- Outsite mid-market (16 locations: Lisbon, NYC, Bali, SF,…) from €1000 (Ericeira/Bali) independent single-location
- Sun & Co town (Spain) from €1200 (closed during peak season)
- Flamingo town (Colombia) from €1200
- Coconat rural (Germany) from €1200 (meals included)
- Nine town (Canary Islands) from €880 (single)
- Entrepreneur Houses suburb (Lisbon); from €750
- Bedndesk town (Majorca) from €1000
- Cloud Citadel town (Alps) from €1050 single, €1650 ensuite
- La Colle rural (France) from €1100
- Hub Fuerteventura town (Canary Islands) from €900 model variantsthese do not match facilities but may be considered as wider competition; for further listings of related spaces see CoWoLi, Digital Nomad House (live-work hubs); coliving.com (mainly residential)
- ReStation town (Canary Islands) from €1000 (separate buildings)
- La Cocoterra town (Spain) from €990 (hostel with only one private room)
- Casa Netural town (Italy) from €650 single (very small)
- Nomad Coliving city (Montreal) from €800 (curated membership, no short-term)
- SunDesk town (Morocco) from €750 (seperate buildings)
- Nectar isolated rural (Spain) from €800 (part-time location)
- Anceu rural (Spain) from €840 (very small)
- Sende lower-market, isolated rural (Spain) from €450 (very basic but 120 guests/year)
- Selina higher-end (19 locations and expanding; short-term hostels); similar aesthetic and philosophy but very different model lacking cohesive community and dedicated workspace
The model has a powerful role in redevelopment, providing strong incentives for professionals to remain depopulated and less popular locations by providing a hub space that dynamises and connects its visitors with local communities — through which opportunities can emerge, be supported and thrive.
The model also intrinsically supports UN Sustainable Development Goals. It enables diverse local and visiting participants to benefit each other through its shared space and ecosystem of exchange…
- Improved access to knowledge (SDG 4) and economic opportunity (SDG 8) through its effect of rotating skilled professionals amongst less developed locations. This encourages knowledge transfer ad-hoc and through talks, workshops, and programmes.
- Also promoting innovation (SDG 9) and working towards reduced inequality (SDG 10).
- Optimised for responsible consumption (SDG 12) by enabling groups to live together efficiently, producing shared meals and sharing resources thus eliminating superfluous consumption.
- Inclusion of those with limited means (SDG 10) through residencies, enabling them to also participate.
- Repurposing of often ex-industrial buildings as collaborate workspaces fostering innovation.
Social Enterprise Approach
Every community needs a space within which its members may connect, exchange and further their collective values.
An open and welcoming space that is also able to draw in neighbouring peoples and communities, greatly enhances its own capacity to then connect everyone together and generate serendipitous opportunities. Nowadays many such spaces are online, e.g. in the form of mailing lists and whatsapp groups… resulting in workers missing face to face interactions and connections, when working remotely.
The Hub House model provides for the redevelopment and repurposing of physical spaces with accommodation — thus having the capability to allow longer interactions, furthering relationship building and knowledge exchange amongst participants whom may not normally cross paths face to face.
A goal of the model is to expand the space's own community reach across multiple diverse locations, furthering the spread of beneficial ideas, skills and opportunities through the movement of its members amongst them, and in exchanges with local communities.
It is able to do this (if at limited pace) by generating revenue and reinvesting an allocated proportion of its profits for the development of new spaces and programmes as a social enterprise (or other similar form).
Assuming fundraising for a single property the first additional location would be possible in the 13th year after return of the original investment, or 8th with deferred return; each property then funding another around every 5 years (without dividends). This could be reduced utilising debt (mortgaging).
The model includes inviting thought leaders and skill practitioners to share their knowledge, in the form of retreats or ad-hoc classes and interactions. This might be expanded for specific fields with dedicated programmes.
Some properties would adequate capacity to accommodate much larger groups, and host more than 50 in its events room with ample presentation area. Outdoor courtyard space (with weather adaptable capability) could host double this.
Should the space be operated with a remit to provide facilities to a community through a profit allocation, doing so whilst offering the accommodation free to selected participants is possible — without an operations impacting revenue reduction.
- created and operated first mixed-use mid-term open access live-work space (2011–2014)
- expanded and adapted for two partner properties as a continuation of the experimental model
- capable with space planning and renovation
- wide sector knowledge as guest at and participant in other operator's spaces
- ex Technical director of small marcomms firm plus long entrepreneurial experience
This is a preliminary outline of a proposed project thus details are not intended to be a specific representation. firstname.lastname@example.org