The Market Seen from the Street: Co-Living in Secondary Locations – Does It Work?
Given its proximity to Parque das Nações, Sacavém has been establishing itself as a growing residential area. Although it is not considered a prime zone, the strategic location close to Lisbon, good accessibility, and prospects for improved infrastructure and urban organization have supported a consistent evolution of the market.
Portugal, however, remains a country with a strong ownership culture: around 70% of the population seeks to buy a home, which limits the development of the rental market. The truth is that there are no “reasonable” alternatives to buying, which, combined with current lifestyle dynamics and demographic changes, opens a clear opportunity for buildings designed specifically for rental.
Nevertheless, the urban planning framework continues to hinder the feasibility of traditional residential projects for this purpose, mainly because:
Developing for speculative sale is more profitable;
Urban planning constraints, such as minimum area requirements per typology and mandatory parking, compromise economic viability.
In this context, Co-Living emerges as a realistic alternative aligned with market needs. Although the concept is still at an early stage in Portugal, investor interest has been concentrated in prime locations such as Lisbon and Porto.
The question is: is there room to develop this product in secondary locations? Our conviction is that there is. On the demand side, there is no doubt.
Secondary Location: Sacavém
The centrality of Sacavém, in the municipality of Loures, reinforces its potential and the growing demand in the rental market.
📍 Location and Accessibility
Proximity to Lisbon, with fast access via A1 and A30;
Good public transport network;
Local commerce and services available in the urban center.
🚆 Rail connectivity with Lisbon:
Sacavém → Oriente: ~ 5 minutes
Sacavém → Braço de Prata: ~ 8 minutes
Sacavém → Santa Apolónia: ~ 14 minutes
📊 Demographics, Income, and Housing
According to the 2021 Census, the municipality of Loures had 201,590 inhabitants, with an average of 2.47 people per household. Highlights include:
59.1% of households consist of 1 to 2 people (profile suited to Co-Living);
61.1% of dwellings are owner-occupied (below the national average of 70%);
31.3% of households are rented (10% above the national average).
Between 2011 and 2021, Loures lost 1.7% of its population. However, between 2019 and 2023, the foreign resident population grew by +64.2%, driving rental demand and pushing rents upward.
In terms of financial commitments, 43.5% of homeowners have a mortgage, with monthly installments in most cases up to €650.
💡 Demand – Idealista Data
Most in-demand typologies: T2 (purchase and rental), followed by T1;
Preferred size: 61–75 m²;
Most relevant price ranges:
📈 According to SIR, the average rental price for a T1 (~43 m²) is around €850/month.
The Real Estate Project
Considering the asset’s location, the associated urban planning framework, and current market dynamics, the development of a Co-Living project has been considered as an alternative to a traditional residential model focused on rental.
This housing concept envisions the creation of 54 accommodation units, each around 30 m², sharing a network of common spaces designated for services, namely:
✔ Work and study areas;
✔ Dining spaces;
✔ Leisure and social areas;
✔ Gym.
The proposal aims to respond to the growing demand for more flexible housing solutions adapted to new lifestyles, offering a viable and competitive alternative to the traditional residential market.
“By reducing circulation areas to the bare minimum and carefully designing fixed furniture, it is possible to find efficient architectural solutions even in small areas. To achieve this, spaces must be designed to be as versatile as possible. As we demonstrate here, it is possible, in less than 30 m², to integrate areas for rest, leisure, meals, and work. Ultimately, we want the shared spaces in the co-living building not to appear merely as a functional necessity, but rather as a complement: an extension of each self-sufficient unit that expands its versatility through these shared spaces.”
– Arch. João Franco
Figure 1 – Layout Scheme, Accommodation Unit, View 1
Figure 2 – Layout Scheme, Accommodation Unit, View 2
Figure 3 – Layout Scheme, Common Areas, View 1
Figure 4 – Layout Scheme, Common Areas, View 2
User Profiles
The Co-Living model in Sacavém is suitable for different user profiles, reflecting current dynamics in the housing market:
✔ Young families, mostly made up of up to two people (couple), seeking a functional, well-located solution while they lack the capacity to buy their own home or rent a larger apartment. (Note: students can also fit this profile, though they tend to be more price-sensitive.)
✔ Divorced individuals, usually middle-aged, who need practical accommodation with easy access to services and close to Lisbon.
✔ Companies, looking for housing solutions for relocated workers or expatriates, ensuring contracts with “fixed rent and year-round availability.”
Simplified Calculations
1. Estimated Development Costs
(excludes land acquisition and financing costs)
1.1 Hard Costs
Construction: €4,653,033
1.2 Land
To be defined
1.3 Soft Costs – €402,525
Design projects
Urban/municipal fees
Management and administration
1.4 Development cost per unit: €93,621.44
Figure 5 – Cost Estimate, Summary
2. Estimated Rental Income
Gross rent per unit: €800/month
Gross annual rent for the building: €518,400
Annual operating costs: 20% of annual rent = €103,680
Based on this simplified economic rationale (excluding land and financing costs):
➡️ Gross Yield of the asset (before taxes): 8.7%
Key Question: Given the financial structure presented, the central issue is: what value should be attributed to the land without compromising the project’s economic viability?
3. Conclusions
From a demand perspective, the peripheral areas of major urban centers show significant attractiveness for developing housing formats oriented towards rental.
However, the cost, development timeline, and financing of these assets remain challenges to be mitigated in order to reduce risk and maximize performance.
The simplification of licensing processes and the adoption of modular construction systems emerge as strong allies in creating conditions that make this type of housing viable. (Note: Despite its importance, it is not worth revisiting the issue of taxation here.)
Scale is another critical factor on the checklist of major players, given its direct influence on development costs and operational efficiency.
The big question is: is there room for an intermediate product that doesn’t meet the entire checklist, but that in secondary locations could challenge current investment criteria?
At least from a capital allocation perspective, these would necessarily be shorter-term investments, with significant savings on land cost. Depending on the case and the specific location, the capital required to develop one asset in a prime zone could be equivalent to developing two assets in “safe” secondary locations.
Credits:
✒️ Article by: André Casaca
📐 Architectural Study – João Franco
📊 Market Analysis – Pedro Almeida
