How Co-Living is Redefining Communities in Thailand
The co-living sector has experienced significant growth in recent years. This trend is expected to continue as more people seek flexible housing solutions that prioritize community living, convenience, and affordability.
Co-living is primed to enter the real estate mainstream in Thailand. As is well-documented, Thailand’s residential market has diversified substantially over the past few decades with changing lifestyles. Co-living aligns with established shifts and is the latest evolution in the market to address new demands, to cater to a demographic seeking an alternative accommodation and combat high costs of living.
A common question is how is co-living different from traditional residences, such as apartments, condominiums, and houses? At the most basic level, co-living introduces facilities and common areas that are shared in aid of fostering collaboration, a community, and a deeper relationship among residents.
Certain co-living providers may focus on a particular demographic, such as digital nomads, creative freelancers, young entrepreneurs, high-skill individuals, or professional expatriates. But crucially, co-living comes with the added benefit of programs to encourage social cohesiveness and communal bonding.
The accommodation itself can be both short and long-term in nature, and as such classified as multifamily residences or hotels depending on length of stay. In Thailand, multifamily residences may only legally rent out accommodation on a monthly basis as stays of less than one month require a hotel license.
Co-living is at a different stage of development in Thailand, but one can look regionally for inspiration on how the market may develop. The concept has been introduced and refined in high-cost cities including Hong Kong, Tokyo and Singapore for several years.
Closer to home, co-living activity in Thailand has accelerated over the past three years. The entrance of two international players into the Thai market, in both Bangkok and Phuket, has unlocked the potential of the concept in the country.
Ascott International debuted their Lyf Sukhumvit 8 property in Bangkok in 2022, providing common space for work and play whilst offering shared kitchen facilities. The property is in proximity to the popular “Pub Street” on Sukhumvit Soi 11 in Nana, benefiting from short-term tourist demand.
HOMA, backed by Asia Capital Real Estate (ACRE), opened their first property in Phuket Town in 2021 followed by another in Si Racha in 2022. Their Phuket Town property includes a large co-working space, multiple meeting rooms, weekly talks and football matches organised by the management team to create a sense of community for their targeted young professionals and digital nomad markets.
In January 2024, ACRE has just opened HOMA Cherngtalay in Phuket for additional 423 keys, serving the strong demand in the island.
According to the Bank of Thailand and National Economic and Social Development Council, average land prices in Bangkok Metropolitan Region have increased by approximately 6% annually over the previous decade while average wages have not kept pace, increasing by only 3%. In combination with the rising rates of interest seen over the previous 18 months, macroeconomic factors are appropriate for operators to tap into this cohort.
Cost of living is not the primary impetus behind the ventures in Thailand. Co-living operators are taking advantage of Thailand’s diverse nature, compelling food culture, and shopping destinations to target digital nomads and “bleisure” travellers (those mixing both business and leisure). The added sense of community, ease to secure accommodation, and flexibility to move also makes this a compelling offer for local young professionals.
“We have seen a declining trend of home ownership in the younger generation, and we believe renting will be more appealing in the future. Co-living is about curating physical rooms and facilities, but more importantly, the concept creates software for a tenant’s living experience. In Phuket Town, for example, we provide co-working space because 40% of our tenants work from home. We initiate social activities and constantly improve local programming to enhance our tenants’ stays. We are in the business of providing high quality living, and residents' increased sense of community and potential to make new friends only improves this aspiration.” says Luca Dotti, Founder and Managing Director at HOMA.
Co-living solutions in Thailand will likely vary across different markets. Yes, on one hand, it will address high costs of living, however, on the other hand, it will provide a unique “living software” to a specific location. With demand for great flexibility, co-living provides the opportunity to eliminate hassles such as letting agents, furnishing expenses, and maintenance, which are all included in one price.
“Given that co-living appeals to both short and long-term demand, there exist many opportunities in Thailand to cater to tourists and young professionals seeking a balance of work, lifestyle and community”, added Ratima Lueangwattanakit, Senior Associate, JLL Hotels & Hospitality Group.