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Landmark Sydney co-living property UKO Newtown Village has sold for $10.425 million to an offshore investor in a deal that underscores growing appetite for the nascent asset class.
The inner-west property at 8-10 Station Street in Newtown achieved a rate of $548,684 per key across its 19 studios and has been sold on net yield of 4.15 per cent on the existing UKO management agreement.
The sale's yield sits below the global co-living yield range of 4.5 to 5.5 per cent recorded by JLL as of mid-2024, indicating a tightening for the asset class in Sydney's tightly held market.
Knight Frank brokered the sale, which attracted competition from local and international buyers across multiple rounds of the campaign.
The 474.7sqm building sits on a 382.9sqm site and was converted from the former Sydney Confectionary Warehouse in 2019.
It is 100 per cent leased to co-living operator UKO and generates gross income of $632,333 per year.
“The sale was an extremely strong result,” says James Masselos, of Knight Frank.
“We anticipated significant buyer interest but the level of enquiry during the campaign exceeded our expectations.
“Despite evident headwinds in the broader economy, the co-living sector is continuing to experience strong levels of demand from local and offshore purchasers looking to capitalise on the high demand for the product."
Masselos notes that the sale was aided by Sydney's shortage of homes relative to demand.
"There is strong tenant demand for co-living units, with affordability being a key driver," he says.
“Offerings such as UKO Newtown Village, in a densely populated urban area with access to existing amenity, transport links and employment, are particularly sought after."
Knight Frank's Adam Droubi says the property's heritage character and UKO's track record as a tenant were key drawcards for prospective purchasers.
“Its tenant covenant and secure cash flow was also a strong drawcard, with UKO being a reputable co-living brand known for its strong community engagement and high resident satisfaction," says Droubi.
“We expect co-living assets to maintain their desirability in the current market with tenant demand and returns to remain solid.”
Sydney dominates Australia's co-living landscape, accounting for more than 90 per cent of the country's total co-living activity.
According to a report from Knight Frank earlier this year, 2025 was a landmark year for the co-living sector, with strong interest from developers and investors leading to significant growth in the sector.
Knight Frank expects an acceleration in the overall development pipeline in 2026 with 1,110 units planned for projects in Victoria, Western Australia and Queensland, noting that the relatively small figure highlights both the nascent stage of the market and the opportunity for growth.
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