DTZI and The Collective launch world’s first co-living fund

Co-living provider The Collective has teamed up with DTZ Investors to launch the world’s first co-living fund, seeking to raise £650m. The new fund, DTZ Investors Co-Living Fund I, dubbed COLIV, will aim to deploy £1bn on six to 10 projects in Greater London over 10 years. It is seeded with £70m of investment, with DTZI and The Collective committing £10m to the fund. COLIV is the first institutional investment vehicle investing in at-scale purpose-built co-living buildings. It is targeting a core-plus internal rate of return of 8-10%. The fund aims to build a portfolio over the next four years by forward funding developments and acquiring existing assets from The Collective’s pipeline. It will finance developments with pre-agreed occupancy targets to provide stabilised cash flow. DTZI will advise the fund and The Collective will act as asset manager and property manager. The fund’s first investment will be a forward-funding deal to deliver a 222-room scheme in Harrow, north London (pictured below). The Collective Harrow received planning consent in 2018 and construction is expected to start imminently. Reza Merchant, chief executive and founder of The Collective, said: “Our experience in creating, delivering and operating co-living spaces across London over the past 10 years, paired with DTZI’s deep-rooted investment advisory expertise and institutional relationships, provides the foundation for a sustainable operational model that will underpin returns to investors. “It also allows us to significantly grow and deliver our pipeline in London in the coming years while retaining long-term involvement on all of our projects.” DTZ Investors chief executive Chris Cooper (pictured above left with Merchant) said: “It’s an important step in the development of our business to be leading the market in the delivery of innovative solutions to London’s housing shortage. “This fund will bring forward a strong social agenda through: the buildings and places we create; the manner in which we engage with our communities and the way in which we foster wellbeing for members.” The Collective was founded in 2012 by  Merchant. It has a portfolio of 7,500 units at various stages of development, mainly in London, with a GDV of £3bn. Last year, the developer expanded to Germany and the United States, and it has announced plans to launch in Dublin. It has also broadened its offering to include hotels and plans to grow to more than 100,000 units by 2025. [caption id="attachment_1002039" align="aligncenter" width="847"] The Collective Harrow[/caption] To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette