Coliving Cap Rate Benchmarks by City (2026 Data)

Understanding Coliving Cap Rates

The capitalization rate (cap rate) measures the expected return on a coliving property investment, calculated as Net Operating Income (NOI) divided by property value. In coliving, cap rates typically range from 4-8% depending on market maturity, location, and operational risk.

European Coliving Cap Rates

London: 4.0-5.0%, The most mature European market with institutional investor activity compressing yields. Prime locations (Zone 1-2) at the lower end.

Berlin: 4.5-5.5%, Strong demand from digital nomads and young professionals. Regulatory risk (Mietendeckel) adds a premium.

Amsterdam: 4.5-5.5%, Limited supply, strong demand, but stringent housing regulations create barriers to entry.

Lisbon: 5.5-6.5%, Higher yields reflecting a less mature market with strong growth potential from digital nomads.

Barcelona: 5.0-6.0%, Tourist regulation creates complexity but demand remains strong year-round.

Asia-Pacific Coliving Cap Rates

Singapore: 3.5-4.5%, Lowest yields but highest stability and regulatory clarity.

Mumbai: 7.0-9.0%, Higher yields reflecting operational risk and market immaturity, but massive scale potential.

Bangalore: 6.5-8.5%, Strong tech talent demand driving coliving growth. Scale economics improving rapidly.

Sydney: 4.5-5.5%, Mature rental market with growing coliving acceptance. High property costs offset by premium pricing.

Americas Coliving Cap Rates

New York: 4.0-5.0%, Premium market with strong demand but regulatory complexity and high property costs.

Austin: 5.5-6.5%, Growing tech hub with favorable regulations and lower property costs.

Mexico City: 6.5-8.0%, Emerging market with strong digital nomad demand and favorable cost structures.

What Drives Cap Rate Differences?

Key factors: market maturity (more mature = lower yields), regulatory risk, property acquisition costs, operational complexity, and investor competition. Use our benchmarks dashboard for comprehensive KPI data and our ROI calculator to model specific investment scenarios.

Frequently Asked Questions

Are coliving cap rates higher or lower than traditional BTR?

Generally 50-150 basis points higher than BTR in the same market, reflecting the operational complexity and management intensity of coliving. This premium is narrowing as the sector matures.

How do I calculate NOI for a coliving property?

Total Revenue (room rent + ancillary income) minus Operating Expenses (rent/mortgage, staff, utilities, maintenance, marketing, insurance, technology). Exclude debt service and capital expenditure. Use our cash flow projector for detailed modeling.

How to read these cap rate ranges

The cap rate bands below reflect 2026 transactions data and operator-grade underwriting comparables. Lower bound = institutional-grade purpose-built or large stabilized portfolios; upper bound = boutique single-property deals or lease-up risk-adjusted. Always sense-check these against the specific deal's NOI quality, lease structure, regulatory exposure, and exit liquidity assumptions.

Major Western markets

• Singapore - 3.5-5.0%. Lowest in any major coliving market. Reflects deep institutional capital pool and macro stability.
• London H16 schemes - 4.5-6.0%. Sui generis large-scale shared living trades like high-quality multifamily.
• NYC Class A - 4.5-5.5%. Capital is willing to accept thin yield because of NYC demand depth.
• Paris - 4.5-6.0%. Loi ELAN compliance + demand depth.
• Berlin - 4.5-6.0%. Tight despite Mietpreisbremse - institutional view of demand depth.
• Madrid - 5.5-7.0%. Permissive regulation + Latin American inflow.
• Lisbon - 5.5-7.0%. Mais Habitação compressed AL but residential coliving cap rates stable.
• Austin - 6.0-7.5%. Highest US permissive market.

Emerging markets

• Mexico City - 8-11%. Emerging-market premium for FX + regulatory drift.
• Bangalore + Mumbai - 9-13%. Indian coliving as a category trades at meaningful premium reflecting consolidation risk.
• Dubai - 7-9%. Tax-free + USD-pegged means cap rates compress faster than other emerging markets as track records establish.
• Bangkok + KL - 8-11%. Smaller institutional pool; deal-by-deal pricing.
• Cape Town + Johannesburg - 10-13%. SA-rand exposure adds risk premium.

What's compressing cap rates

1. Institutional capital pool deepening (Greystar, Round Hill, Patrizia, M&G all now have dedicated coliving allocations). 2. Brand operators (Habyt, Common) creating reliable operating partners institutional capital can underwrite. 3. Demand resilience post-2020 has been better than skeptics expected.

What's expanding cap rates

1. Regulatory uncertainty in some markets (Berlin, Barcelona). 2. Single-tenant concentration risk in smaller portfolios. 3. Operator key-person risk where founder transitions aren't documented.

Related resources

• City-specific benchmarks: All city benchmark pages
• Cap rate explainer: Cap Rate (glossary)
• Underwriting workflow: How to Underwrite a Coliving Deal

Yield spread analysis: where mature compresses to emerging

Cap rate benchmarks tell you what assets trade at. Yield spreads tell you where capital is moving. The table below shows the 2026 spread between gateway and emerging markets in each region, against 2022 and 2024 baselines.

Region	Gateway cap rate (2026)	Emerging cap rate (2026)	Current spread	2022 spread
Europe	4.5%	7.0%	250 bps	180 bps
North America	4.5%	7.5%	300 bps	220 bps
Asia-Pacific	4.0%	9.0%	500 bps	380 bps
Latin America	6.5%	9.5%	300 bps	250 bps
MENA	7.0%	10.5%	350 bps	280 bps

The pattern across regions is consistent: spreads have widened by 70-120 basis points since 2022. The narrative explanation is that institutional capital has compressed gateway yields modestly while emerging-market yield demands have risen to reflect higher debt costs and a more discriminating capital base.

What actually drives the gateway vs emerging gap

• Operator track record concentration. Gateway markets host operators with 5-10+ year operating histories. Institutional capital underwrites that history at a premium. Emerging markets host fewer operators with comparable longevity.
• Exit liquidity. Gateway-market stabilized coliving assets have multiple potential buyers (REITs, multi-city platforms, institutional family offices). Emerging-market exits require more bespoke buyer-finding.
• Regulatory predictability. Gateway markets have either clear coliving regulation or established practical pathways. Emerging markets carry meaningful regulatory drift risk over a 5-7 year hold.
• FX and currency risk. Many emerging markets carry currency risk that institutional capital underwrites with 100-300 bps of additional cap rate.

City-by-city 2026 underwriting bands

City	Cap rate band	Note
London	4.0-5.0%	Mature; institutional dominant; PBSA convergence
Berlin	4.5-5.5%	Regulatory premium has compressed; demand resilient
Amsterdam	4.5-5.5%	Supply constrained; regulatory tight
Paris	4.5-5.5%	Premium positioning, limited institutional product
Madrid	5.0-6.0%	Strong nomad demand, growing institutional interest
Barcelona	5.0-6.0%	Regulatory complexity offset by demand strength
Lisbon	5.5-6.5%	NHR sunset priced in; institutional pool growing
Singapore	3.5-4.5%	Lowest yields globally; highest stability
Tokyo	4.0-5.0%	J-REIT capital probing the segment
Sydney	4.5-5.5%	BTR convergence; institutional pathway opening
Mumbai	7.5-9.5%	Operational risk dominant; consolidation upside
Bangalore	7.0-8.5%	Tech demand strong; brand-builder window open
Bangkok	8.0-10.0%	Smaller institutional pool; deal-specific pricing
Dubai	7.0-9.0%	Compressing fastest in MENA; track records building
Mexico City	6.5-8.0%	Nomad demand strong; institutional capital nascent
Sao Paulo	7.0-9.0%	Local capital dominant; currency risk priced

Stabilized vs lease-up: the cap rate adjustment

Almost every coliving asset trades at a different cap rate depending on whether it is stabilized (24+ months at target occupancy) or still in lease-up. The 2026 spread between stabilized and lease-up trades is typically 150-300 basis points, reflecting:

• Occupancy risk premium. A property at month 9 of lease-up with 67% occupancy trades materially below stabilized pricing.
• Operator key-person risk. Lease-up properties depend more on operator execution. Stabilized properties can survive operator transition.
• Documented operating expenses. Stabilized assets have 24+ months of validated OpEx data. Lease-up assets carry estimation risk.

What to actually watch in the cap rate environment

1. 10-year sovereign rates. Coliving cap rates broadly track sovereign rates with a 200-350 bps spread. A 75 bps sovereign rate move repositions the entire cap rate curve.
2. Institutional capital commitments. When Greystar, Round Hill, M&G, or Ascott announces a new coliving allocation, expect 25-75 bps of compression in their target markets over the following 12-18 months.
3. Public coliving listings. A successful public listing creates comparable pricing discipline for the entire segment. Watch India and Singapore as the most likely first markets for this.
4. Regulatory clarity events. A clean regulatory framework in Berlin, Barcelona, or another major market would compress cap rates by 25-50 bps in that market.

Practical underwriting checklist for coliving cap rate analysis

1. Use stabilized cap rates, not lease-up cap rates. Stabilized cap rates reflect 24+ months at target occupancy. Lease-up cap rates reflect ongoing occupancy build. Confusing the two is the most common underwriting error.
2. Underwrite blended 12-month occupancy. Peak-month occupancy is not a useful cap rate input. Use blended 12-month occupancy that accounts for seasonality and turnover periods.
3. Validate OpEx against EC benchmarks. Operator-provided OpEx is often understated. Validate against EC benchmark per-bed OpEx in comparable markets.
4. Include capital reserves. Coliving CapEx reserves are typically $80-$180 per bed per year. Excluded from NOI in many operator-provided P&Ls.
5. Adjust for length of stay risk. Properties with average length of stay below 4 months carry higher turnover OpEx and channel commission. Cap rate should reflect this.
6. Document the regulatory pathway. A clean cap rate analysis depends on a clean operating pathway. Properties operating in regulatory edge cases carry material additional risk.

Comparing coliving cap rates to other real estate categories

Category	Mature market cap rate	Emerging market cap rate	Spread vs coliving
Multifamily	3.5-4.5%	6.5-8.5%	Coliving trades +50-100 bps wider
Student housing (PBSA)	4.0-5.0%	7.0-9.0%	Coliving trades roughly in line
Serviced apartments	4.5-5.5%	7.5-9.5%	Coliving trades roughly in line
Hotel	6.0-8.0%	9.0-12.0%	Coliving trades materially tighter
Senior coliving	5.0-6.5%	8.0-10.0%	Premium positioning compresses spread

What investors should actually take away

• Cap rates are converging with PBSA and serviced apartments. Coliving institutional pricing now closely tracks adjacent flexible-living categories. The "coliving premium" of 2018-19 has largely dissipated as the category has matured.
• Operator quality drives 50-100 bps of cap rate variation. Documented operating history, professional management, and platform-level discipline command pricing premium.
• Regulatory clarity drives 25-75 bps of cap rate variation. Markets with clean regulatory frameworks trade tighter than markets with ambiguous frameworks.
• FX and currency risk costs 100-300 bps in emerging markets. Cross-border capital deploying without currency hedging absorbs this spread.