ABOUT THIS EPISODE
In the latest episode of PropCast, Chris Riley of Bywater Group and Oliver Lowrie of Ackroyd Lowrie discuss what it takes to design, fund and deliver co-living at scale, why timber construction halves upfront carbon, and what the sector’s rapid growth means for institutional capital.
“Design shouldn’t cost extra,” says Oliver Lowrie, co-founder of Ackroyd Lowrie, the architecture practice behind a growing number of London’s co-living schemes. “Gone are the days when you hired a star architect to produce something that looked amazing but wasn’t buildable. We know what the thing’s going to be built out of. It needs to be about pragmatism and making great design.”
Nearly 9,000 co-living units were consented across the UK in 2025, according to data compiled by Savills, up 27% on the previous year’s record. In London alone, consents nearly doubled. The capital is arriving. The question is whether the capital (and customers) believe the buildings will be worth it.
Lowrie is joined on this week’s PropCast by Chris Riley, who leads development at Bywater Group, the timber-focused developer and investment manager majority-owned by Sumitomo Forestry. Lowrie has designed several co-living schemes for Bywater, including a 112-unit development at Tanner Street in Bermondsey that won planning consent earlier this year. The two firms share a passion for timber construction and low-carbon delivery that sets them apart from the pack. Their collaboration is a useful lens through which to see where the sector might be heading next as it becomes more institutional-ready.
Bywater began life as a family-office developer with a conviction for timber long before sustainability became cool. In 2019, Sumitomo Forestry, the Tokyo-listed forestry and housebuilding group founded in 1691, came in on a single scheme: Paradise, a mass-timber office development near Vauxhall. By February 2023, that relationship had evolved into a full corporate merger, with Sumitomo taking a majority stake. The business has since grown from four people to more than 20, with an FCA-regulated fund platform and a first fund, Bywater Fulcrum Value Add Real Estate, now closed and deploying through an LTAF structure. Its first acquisition is 1 Frying Pan Alley in Spitalfields, another office scheme which will be retrofitted to A-grade status using timber.
“It was a game-changer,” Riley says of Sumitomo taking a 51% stake. “We’re a timber-led business. Where we can, we will incorporate glulam and CLT into our schemes. But this is as much about commercial performance as it is carbon.”
Sumitomo stewards more than 40,000 hectares of forest in Japan. Its US housebuilding operations include Tri Pointe Homes (acquired in February 2026 for around $4.3bn) and DRB Group. That scale of parent gives Bywater patient capital, timber expertise and a governance framework that has alerted institutional investors to their unsung book of opportunities.
Living is now at the centre of the strategy. Bywater is active across co-living, build-to-rent and student housing, with three co-living schemes in south London designed by Ackroyd Lowrie and operated by Greystar, and a mid-rise BTR scheme in Kingston approaching planning consent.
Paradise, which opened in 2025, is the UK’s lowest embodied carbon mass-timber office development at 413 kgCO₂e/m². Riley describes the residential ambition as building “a platform on the same low-carbon, timber-led foundations”. Lord Walker of Broxton, Bywater's chairman, brings a platform that few property businesses can match. As chairman of Iceland and the government's Cost of Living Champion, he sits at the intersection of housing, affordability and political access, and has used that position to make the case, including in the House of Lords, that the way Britain builds homes is inseparable from the cost-of-living crisis it is trying to solve.
Both believe co-living could be playing more of a role in solving the housing crisis and, with headwinds still impacting the housing market and notably the viability of ground-up BTR, its younger sibling of an asset class is attractive on account of its higher yields and lower entry point in terms of rents.
“Last year was the year it went from a small subset to something becoming mainstream,” says Lowrie. “Particularly in London, there is so much coming through the pipeline. These applications are going in, they’re going to get consented, they’re going to get funded. Probably not all of them. But a lot of them are.”
Lowrie recently published a co-living design guide, drawing on data compiled exclusively by Savills, covers room sizes, amenity ratios, communal space design and the planning framework that now governs co-living in London. Rather than rehearsing the investment thesis, it takes the decision to build co-living as read and sets out how to get it right. “There are plenty of white papers making the case for why co-living is the next fundable asset,” he says. “This starts from a different place. Chris is in the room to confirm that it is fundable. So the question becomes: how do you actually deliver it well?”
A cautionary tale
Of course, the first name that enters everyone’s minds when discussing co-living is The Collective. Founded in 2010 by Reza Merchant and once the poster child of UK co-living, collapsed into administration in 2021 after racking up losses of £54m in 18 months. The Canary Wharf flagship was sold to Crosstree for £190m in 2022. The original Old Oak scheme, the first large-scale purpose-built co-living building in the UK, was valued at £125m in 2018; Henderson Park acquired the 551-bedroom property for around £60m.
“The second generation are going to blow them out of the water,” says Lowrie. “Before the policies existed, there were no minimum room sizes, no standardisation of amenities. Those first schemes were under-amenities, and they’re going to struggle against what’s coming through now.”
The evidence from better-designed schemes supports that. Cheyne Capital’s Mason & Fifth at Westbourne Park, a 332-studio scheme, was fully let within three to four months of opening. “If it’s the right scheme in the right location, the demand is there,” says Riley.
A “dream project”: timber, heritage and 50% carbon savings
The duo’s Tanner Street scheme in Bermondsey is a fine example of how such projects can rejuvenate old buildings while preserving the spirit of their architectural past. The 112-unit co-living development retains an existing Victorian warehouse and builds new elements in glulam and CLT, saving roughly 50% in upfront embodied carbon compared with traditional construction.
“We’ve put sustainability at the heart of that building and we’ve put building users at the heart of it,” Riley says. “Gym, co-working, shared dining space, rooftop terraces, interactive rooms where you could play golf on a simulator or watch TV together as a group.” Lowrie adds that it is “a dream project for us”, one that “puts sustainability at the front and centre of the design process, not just in the retention and celebration of the existing Victorian warehouse, but through the cross-laminated timber structure.”
Riley is emphatic when pressed around the obvious question of fire safety. “Anything below 18 metres meets building regulations,” he says. “I would actually argue it’s safer. We have fire consultants involved from day one. The microscope is on us more than others, so we definitely do not cut any corners.” The bigger practical challenge, it turns out, is acoustics. Despite being comfortable with the fire performance of exposed CLT, Bywater had to encapsulate the timber at Tanner Street because of impact sound between floors. “You had to put 150mm of concrete on top of the CLT,” Lowrie explains. “Which is somewhat ironic.”
Timber also offers commercial advantages beyond carbon. Riley points to faster construction: CLT is lighter, requiring fewer piles in the ground, and erection times are materially quicker above it. “So we’re out of the ground faster, which de-risks us.” On adaptability: “I just don’t think it’s any different. We’ve got a glulam frame which acts the same as steel or concrete. It’s a frame.” On the carbon numbers: “The 50% upfront saving is substantial. We’re seeking to do the same in a residential world as we’ve done in commercial.”
Lowrie’s rules of thumb
Across the conversation, Lowrie returns repeatedly to a handful of practical convictions. “Good design is good design,” he says. “The principle is the same whether you’re doing a school, a climbing centre or a co-living scheme.” He calls his approach the Dave Brailsford method: every decision optimised. “You’ve got to get the best consent, but that consent also has to be completely buildable, fundable and exitable. If you’re not thinking from the end point backwards, you’re going to get planning for something you can’t build or can’t fund.”
On scale, he is blunt. “Too big and it doesn’t work. You need to build communities.” Bywater’s approach is to co-locate schemes in close proximity with a single operator (Greystar across all three south London sites) to optimise opex without sacrificing intimacy. On the GLA framework, he gives credit where it is due: Policy H16 “made it so much more fundable” by establishing minimum standards for co-living above 50 rooms. But the guidance is “probably slightly over-amenities” and some requirements “are actually in contradiction to one another”. A good architect needs to know where to push back.
On the first-generation schemes that are now being repriced: “The second generation are going to blow them out of the water.” And on design: “It shouldn’t be a cost on top of the building. Design has a real function in making a stable asset. You have to make places where people want to stay for longer than a year.” Riley agrees. “The key word once you’ve stabilised is stable. You don’t want to be on the treadmill of occupancy that a lot of resi teams run on. If it’s dark and miserable and doesn’t inspire people to want to live there, you’ll never get there. If you can exceed 12 months, happy days.”
As the country’s housing market continues to evolve, what’s clear is that co-living has moved beyond being seen as a fad. While any category of business anywhere will always have a few false starts, now that the sector has experienced grown-ups involved driving design and development; with all manner of learnings fed through from PBSA, BTR and hotels, the sector is fast becoming institutionalised. Both the designs and the data speak for themselves.
In numbers: the co-living market
The broader UK Living sector is now the dominant destination for institutional real estate capital. JLL’s Q1 2026 Living Roundup, authored by Marcus Dixon, Director of UK Residential Research, and Simon Scott, Lead Director of Living Capital Markets, records £3.7bn of Living investment in Q1 2026, up 31% year-on-year and 13% above the five-year average. CBRE’s Q1 2026 data puts the figure at £2.5bn, 74% higher than Q1 2025. Andrew Saunderson, CBRE’s Head of UK Living Capital Markets, describes the attraction to the UK market as “strong”, with “cautious optimism manifesting into positive sentiment across the Living sector”.
Colliers’ EMEA Living Sector Snapshot, published in March 2026 by Damian Harrington, Head of Research for Global Capital Markets, reports that European living sector investment reached €45bn in 2025, making it the second most popular asset type. Colliers’ Global Investor Outlook survey names living as the most popular asset class for 2026.
Co-living’s trajectory within that universe is the steepest. Data compiled exclusively by Savills for Ackroyd Lowrie’s 2026 co-living design guide records 8,847 co-living units granted planning permission across the UK in 2025, with 5,845 in London (nearly double the 2024 figure). Lizzie Beagley, Savills’ Head of PBSA and Co-Living Transactions, describes co-living as “emerging as a distinct sub-sector within the wider institutional market”, noting interest from Cain International, BlackRock, Real Star, Crosstree, DTZIM, APG and CDL.
