London’s Wealthiest Investors Are Betting On Multi-Occupancy Real Estate

London’s luxury property market is undergoing a fundamental transformation as investors shift their money away from single-family prime assets toward high-end multi-occupancy developments including co-living spaces, serviced apartments, and boutique rental residences.

This isn’t a small change at the edges but a major shift reflecting stronger rental returns, diversified income streams, and tenant lifestyle changes favoring flexibility and premium service over traditional ownership models.

Knight Frank’s 2024 data combined with Savills research shows that institutional and private investors have poured over £1.1 billion into London’s co-living sector over the past five years, including £250 million in 2024 alone.

These aren’t speculative bets but calculated moves by smart money managers who’ve identified multi-occupancy as offering better risk-adjusted returns compared to traditional prime residential assets that have dominated London luxury investment for generations.

Key Takeaways

Navigate between overview and detailed analysis

Key Takeaways

• London’s luxury property market is shifting decisively from single-family assets to multi-occupancy investments such as co-living, serviced apartments, and boutique residences, reshaping what “prime” now means for institutional and private investors.
• Over £1.1 billion has flowed into London’s co-living sector in the past five years, with £250 million invested in 2024 alone, marking it as one of the city’s fastest-growing luxury real estate segments.
• New supply is set to triple, rising from 865 units annually (2016–2023) to more than 3,400 units per year between 2024–2027, confirming sustained developer and investor confidence.
• Average yields of 4.3%–5.5% for luxury multi-occupancy assets now outperform traditional prime residential properties averaging just 2.5%–4.5%, providing stronger income and better diversification.
• Neighborhoods such as Canary Wharf, White City, Brent Cross, and Nine Elms are leading this transformation, attracting global capital through regeneration projects and premium rental demand.
• Institutional investors view London’s multi-occupancy sector as a structural opportunity driven by changing tenant lifestyles, professionalized management models, and stable long-term rental growth.

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The Five Ws Analysis

Who:

Institutional investors, family offices, and high-net-worth individuals seeking higher yields and diversified income streams through co-living and serviced apartment developments.

What:

A market-wide transformation toward multi-occupancy luxury assets offering premium amenities, flexible leases, and professionally managed living environments.

When:

Accelerating since 2020, with record institutional inflows in 2024 and a projected 300% increase in unit delivery through 2027.

Where:

Concentrated in high-growth and regeneration zones like Canary Wharf, White City, Brent Cross, Brixton, and Nine Elms—areas combining connectivity, affordability, and tenant demand depth.

Why:

Traditional prime yields have stagnated, while co-living and serviced residences deliver stronger, more stable returns aligned with evolving lifestyle preferences and institutional-grade operations.

The Rise of Multi-Occupancy Real Estate in London

To understand what’s happening, we need to clarify what luxury multi-occupancy actually means. This segment includes co-living, serviced apartments, and boutique residence developments that combine upscale amenities with flexible rental arrangements. This isn’t student housing or budget hostels but premium living spaces targeting wealthy professionals, mobile executives, and international tenants who want hotel-like services combined with residential comfort.

The investment growth has accelerated dramatically over recent years, with Knight Frank’s Co-Living Report 2024 showing that co-living investment in London reached £250 million in 2024, bringing the five-year total to £1.1 billion.

Even more telling is that new co-living construction is projected to increase by 300%, jumping from 865 units per year during 2016-2023 to roughly 3,430 units annually from 2024-2027. This tripling of supply wouldn’t be happening unless developers and investors saw sustained demand that would justify all this new construction.

What’s particularly striking is London’s dominance within the UK market, as the city accounts for 74% of completed UK co-living supply, underlining its position as the clear center of this investment trend. While other UK cities are developing co-living, the heavy concentration in London reflects where international capital, high-earning professionals, and premium rents converge to make the economics work at scale.

Building on this momentum, institutional investors continue pouring money into the sector.

Knight Frank’s September 2024 report “The Rise of the UK Co-Living Sector” notes that since 2020, institutional investors have deployed nearly £1 billion into co-living nationally, with 45% of surveyed global funds planning to increase their exposure by 2028.

When institutions with long investment horizons and sophisticated research teams commit at this scale, it validates the idea that multi-occupancy represents a structural opportunity rather than just a passing trend.

The serviced apartment segment shows equally strong performance, with Savills’ European Serviced Apartments 2024 report indicating UK serviced apartment revenue per available room running approximately 19% above 2019 levels, demonstrating not just recovery from pandemic disruption but genuine growth beyond pre-crisis levels.

Meanwhile, the ASAP Independent Review 2024 shows London holds 12,867 serviced apartments, representing roughly 45% of the UK total and confirming the city’s market leadership.

To put the market size in perspective, Co-Living Group 2024 data estimates London’s co-living market generates approximately £5.35 billion annually in revenue, with average income running 45% higher than standard buy-to-let properties. This premium reflects both higher rental rates and better occupancy management through professional operators that individual landlords struggle to match.

Why London’s Elite Are Turning to Multi-Occupancy Investments

The shift toward multi-occupancy starts with a simple economic reality: the returns are significantly better. Knight Frank and LSH Viewpoint 2025 data show yields for co-living and serviced apartments averaging between 4.3% and 5.5%, substantially outperforming many single-family assets in prime central London that deliver just 2.5% to 4.5%.

In outer and regeneration zones including Barking, Croydon, Dagenham, and Newham, yields climb even higher to between 4.7% and 7.3%, offering returns that approach commercial property without the complex lease structures.

For investors used to prime central London properties delivering under 3% yields and depending entirely on price appreciation for returns, this yield difference represents a game-changing income boost.

Consider that a £10 million investment in prime Mayfair might yield £250,000 annually at 2.5%, while the same money deployed into well-located co-living could generate £450,000 to £550,000 at 4.5% to 5.5% yields. Over a decade, that income difference compounds into millions of pounds that don’t depend on hoping property values go up.

Beyond the numbers, lifestyle changes among tenants are supporting demand in ways that should last. London’s wealthy professionals and mobile expatriate population increasingly prefer flexible, service-oriented living that eliminates property management headaches while providing hotel-style amenities.

Financial Times tracking shows the share of super-prime rentals exceeding £5,000 per week rose from 1.9% in 2019 to 8.3% in 2025, signaling growing luxury rental appetite even among people who could easily afford to buy.

Another compelling advantage comes from how multi-occupancy spreads risk. As JLL’s Serviced Apartment Insights 2024 explains, multi-unit, fully managed assets spread risk across dozens or hundreds of tenants, dramatically reducing vacancy impact and enabling professional yield management through smart pricing and occupancy strategies.

When one tenant in a 200-unit building leaves, it affects just 0.5% of revenue. When the tenant in a single-family mansion leaves, it wipes out 100% of your rental income until you find someone new.

Key London Neighborhoods Leading the Trend

Turning to where this activity is actually happening, Canary Wharf and the Isle of Dogs have emerged as co-living hotspots with developments like Consort Place offering 495 units and ARK Canary Wharf providing 705 beds.

LSH Viewpoint 2025 and Savills data show yields in this area running approximately 5% to 6%, benefiting from strong serviced apartment demand driven by the financial services workforce and Canary Wharf’s ongoing transformation from office-dominated district into mixed-use neighborhood.

Moving west, White City showcases how institutional capital is spreading across London, with Yardhouse’s 209-unit development receiving £88 million in CDL funding. Knight Frank notes the area shows strong occupancy and branded co-living appeal, benefiting from excellent transport links and proximity to both central London and Heathrow while offering more affordable entry points than traditional prime neighborhoods.

Further north, Brent Cross Town represents institutional expansion into areas once overlooked by luxury investors, with DTZ Investors committing £100 million for 300-plus beds. This investment signals confidence in regeneration areas where infrastructure improvements and mixed-use development are creating new residential demand clusters outside the traditional prime zones that have dominated investor attention.

South of the river, Brixton demonstrates how established neighborhoods are adding co-living to their residential mix. The Brixton Junction 63-bed asset, which traded for roughly $20 million, delivers stabilized co-living yields around 5% while benefiting from Brixton’s cultural appeal and improving transport infrastructure that’s making South London increasingly attractive to the demographic that co-living targets.

Meanwhile, Nine Elms and Battersea showcase blended residential and hospitality models, with One Nine Elms combining 334 homes with a 203-room hotel.

Savills and CoStar data indicate this mixed-use approach generates blended yields around 4.5%, diversifying income sources across both residential and short-stay hospitality that respond to different demand drivers and economic cycles.

Looking ahead at what’s coming, the pipeline data confirms this is just the beginning of the build-out phase. LSH Viewpoint 2025 and Knight Frank 2024 show London has 8,425 operational beds in purpose-built co-living as of 2025, with 8,837 additional beds under construction or with planning permission. Top schemes include Old Oak Collective with 546 beds and Dandi Wembley offering 335 beds, both in areas benefiting from Crossrail and major regeneration investment that’s reshaping London’s geography.

How Multi-Occupancy Assets Deliver Stronger Returns

When we break down the numbers in detail, the yield comparison tells the story most clearly. Gerald Eve and NMRK 2024 data shows co-living in London averaging 4.75% yields for existing stock, while LSH Viewpoint 2025 indicates new luxury HMOs and co-living projects delivering between 3.5% and 5%. JLL 2024 reports serviced apartments exceeding 5%, notably higher than traditional build-to-rent.

In contrast, prime central London properties sit at just 2.5% to 4.5% with limited new supply, as Savills data confirms.

But yield is only part of the return picture. Rental growth provides the appreciation component that drives total returns. London prime and co-living rents grew roughly 10% year-over-year in 2025, with high-value units exceeding £4,000 monthly up 1.6% quarter-over-quarter in Q1 2025 alone.

ONS Rental Index 2025 shows UK average gross yields rose to 7.03% in Q2 2025 from 6.73% in 2024, demonstrating that rental growth is driving total returns alongside the yield component.

At the same time, capital values have appreciated even as yields remain attractive. Savills Prime London Update 2025 shows prime London property prices climbed 7.4% in Q2 2025 and 2.3% year-over-year versus Q2 2024. This combination of yield and capital growth delivers total returns that few asset classes have matched during a period of high interest rates and economic uncertainty.

The revenue performance for serviced apartments running approximately 19% above 2019 levels as of H1 2024, per Savills European Serviced Apartments 2024, demonstrates pricing power and occupancy strength that translates directly into investor returns. When operators can push both rates and occupancy at the same time, it signals genuine demand strength rather than just filling rooms through heavy discounting.

What makes these yields reliable rather than theoretical is the occupancy resilience. Knight Frank Co-Living Report 2024 notes that co-living operators report roughly 95% occupancy for stabilized assets in London. This occupancy level, sustained across different market conditions, means revenue projections have high probability of actually happening rather than depending on overly optimistic assumptions about tenant demand.

Looking at broader market sentiment, the data suggests this trend has room to run rather than approaching exhaustion. Nationwide and Halifax Market Review 2025 show property inquiries up 17% year-over-year, with mortgage approvals and transaction volumes at their highest since 2021.

Interest rate cut expectations and wage growth support renewed demand that should flow into both purchase and rental markets, creating tailwinds for multi-occupancy assets.

The future pipeline reinforces that institutional investors see sustained opportunity ahead. Knight Frank projects London will deliver over 3,400 co-living units per year by 2027, representing that dramatic 300% increase from pre-2024 levels. This pipeline underlines sustained confidence and institutional entry at scale rather than speculative overbuilding chasing short-term returns that often signals a market top.

Finally, London’s competitive position within Europe remains strong. Savills European Living Sectors 2025 Forecast identifies London as Europe’s top target city for “living” sector investment returns into 2026, ahead of Paris and Berlin. This ranking reflects the combination of market size, tenant demand depth, legal framework quality, and exit liquidity that makes London the default choice for international capital targeting Europ