Co-living developer targets £5bn London portfolio

A new co-living developer has launched with backing from British Airways Pension Trustees, Dragons’ Den investor Touker Suleyman and the founders of US operator Ollie. Dandi is the newest incarnation of Dandi Living, the co-living developer set up by Ali Reza Ravanshad in 1986. Led by Ravanshad as chairman, lead architect Eva Siskinova and brothers Christopher and Andrew Bledsoe, the new business aims to develop a £5bn luxury co-living portfolio. Dandi will build and hold 15,000 homes in London, followed by international expansion through Europe and the US. It’s a big change in strategy for Ravanshad, whose business has until now focused on HMOs and smaller schemes sold to investors to manage. “Our aim is really to become omnipresent over the course of the next decade,” he says. “As soon as we have anchored four or five of our properties we will be venturing out towards Paris. From there we will try to go to Lisbon and Barcelona, then further afield to New York and Los Angeles.” Dandi’s first scheme will be a 368-bed scheme in Wembley at the former York House, HA9. The 14-storey development was designed by MAA Architects and received prior approval via permitted development rights under Dukelease, with the development backed by BA Pension Trustees. The pension fund has worked with Ravanshad’s former business, Dandi Living, for five years and plans to fund future schemes as Dandi expands in London. “Five years ago, no one was familiar with co-living. For us to get one of the largest pension funds to back us was great,” says Ravanshad. He has grown the pipeline through asset-by-asset joint ventures with various pension funds and family offices, among other funders. “This is something that is attracting a lot of big players,” he adds. Dragons’ Den’s Suleyman has invested in Dandi’s 125-bed Harrow on the Hill scheme at The Heights, HA1, opposite the station, with two more in the pipeline. Dandi has 40 employees and a pipeline of 2,000 homes around London, with upcoming schemes in White City, Clapham, Queen’s Park and Luton. Ravanshad says it will soon expand eastwards with a new site in Islington, N1. California-based brothers Christopher and Andrew Bledsoe have developed the technology for Dandi to manage its growing portfolio, with a target to hit that 15,000-home goal by the end of 2026. “Alone together” Ravanshad claims Dandi is unusual among co-living developers. “You get a lot of people talking about sleeping in the bedroom but living in the building,” he says. “That’s an insult to people who stay in co-living.” Dandi’s 255 sq ft rooms (24 sq m) are larger than the typical co-living flat. The developer incorporates space-saving flexible interiors, with a bed that rises into the ceiling revealing a skylight and foldaway kitchens, and homes designed to provide various modes over the course of a day: sleep, work-study, dine and unwind. “People want to be alone together. You want to live in a building with lovely areas but you must be able to retreat to your own environment with your preferred people,” says Ravanshad (pictured). The vertically integrated company has a 25,000 sq ft facility in Park Royal to manufacture everything from wardrobes, desks and beds to the kitchen sink. “We wanted to make luxury living accessible,” adds Ravanshad. “The only way to do it is to have control of the buying, planning process and the fit-out, without having any middle man.” Adding to Ravanshad’s trailblazing argument is that the company was not only the first to sway institutions, but also the first to trade assets, he notes – a £73m portfolio sale to Sweden’s Akelius was struck in 2017. But in trading assets, Dandi lacked the technology to manage a portfolio. “We really concentrated on the propco, on the physical aspect of co-living. What you see, feel, smell, it was all part and parcel of Dandi,” says Ravanshad. “Those services to complement those physical aspects, that was something we’d taken our eyes off.” And that’s where the Bledsoe brothers come in. They created Ollie in 2012. The platform managed several schemes across North America, including the continent’s largest purpose-built asset, comprising 422 beds in up to 42 storeys. They left Ollie last year and sold the platform to Starcity. “I wanted to stay in co-living but I needed a new business model that wasn’t asset-light,” says Christopher Bledsoe (pictured, below left). “I didn’t think the asset-light operating model was the way to have maximal social or financial impact. It didn’t give us enough control over the actual physical experience that we were delivering to tenants and it also didn’t give us enough participation in the real estate cashflows that the project was generating.” Investor reticence The first step was to create the technology and infrastructure to operate the built assets, now the next stage will be to create the tool to expand this globally. Bledsoe says the industry’s growth has been stunted, not through lack of demand for co-living, but investor reticence to back unproven concepts. “Co-living globally has not scaled as quickly as it can or should. The reason is supply side, convincing institutional capital, the kind of capital that is necessary to build these substantial projects and make a dent in the market.” “We are really looking to grow a global brand,” says Bledsoe. “The most efficient way for us to do that is by identifying programmatic sources of capital. This is really where my efforts will start to shift.” Bledsoe is hesitant to share all the details and says the product is still being fine-tuned. “I’ve been working with the team on something that would give us a different approach to scaling co-living in the States than what any other co-living operator is currently doing.” In the age of proptech SPACs, Bledsoe’s recent appointment as executive vice-president of strategic investments at Shelter Acquisition Corp could be telling. The new SPAC aims to deliver private real estate companies to the public markets. Something of this nature would help overcome those supply barriers, helping to deliver the big vision for those small homes. “Suffice to say, we have a pretty robust business plan that has mostly been put together, and then we will be going out to market,” he adds. To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette