Colife, a UAE-based smart-rental startup operating as a full-cycle property management company, has begun its expansion into the Asian market, starting with Hong Kong in May 2024.

Since its establishment in 2022, Colife has been revolutionizing the rental market in Dubai and, more recently, Istanbul (2023). Now, the company sets its sights on further expansion across the MENA (Middle East and North Africa) and Asian regions. By 2028, Colife plans to establish a presence in 10 major cities, leveraging their innovative approach to redefine urban living and investment opportunities.

Unlike Dubai, where Colife focuses on apartment rentals, their strategy in Hong Kong centers around creating co-living spaces. These are rental formats with fully furnished rooms featuring stylish interiors and functional common areas. Currently, Colife offers unique mid-term rentals of apartments and rooms in Causeway Bay, Sheung Wan, and Happy Valley areas of Hong Kong Island. All services, support, and community events are included in the rent, making it effortless for young professionals and digital nomads to start their lives in the metropolis without sacrificing comfort or the desire to live in beautiful apartments within prime locations.

The plan for the year in Hong Kong is to launch individual apartment rentals, create more than 100 units in co-livings (rooms and bed spaces), and find a building to open a full-scale co-living house for about 60 units. These common spaces for residents will not only include a living room, kitchen, and bathroom, but also coworking areas, reception, meeting rooms, and more.

Colife's mission is to improve the Net Promoter Score (NPS) for rental experiences in iconic cities across Asia and the MENA region. They aim to democratize rental living for young professionals in major cities where stylish housing can be hard to come by and forming a community is challenging. Hong Kong, with its poor user experience, lengthy processes lacking in quick and quality service, yet exorbitant prices, perfectly exemplifies these criteria.

Despite the challenges of deglobalization, Colife began preparatory work six months before the Hong Kong launch to formalize the company, set up accounts, and gather the team. The launch was accomplished by a core team of three employees - a Senior Project Manager, a Legal Manager, and an Operations Manager. They were remotely supported by six specialists from Colife Dubai, ranging from an Interior Designer to the CEO. This strategic approach ensured a smooth and efficient entry into the Hong Kong market.

Colife budgets up to USD 350,000 to launch a new region. This budget covers company setup, local marketing, team expenses, and apartment renovations. With these resources, they can launch 3 to 10 first units, depending on the cost of the region. During the first year, Colife continues to invest, totaling about USD 2 million, to assess if the model works in the region.

"Initially, we aim to minimize investments, as no amount of online research can provide a complete picture. During the first year, when we are learning and adjusting to new markets, we strive to invest conservatively," says Ilnara Muzafiarova, CEO of Colife Global. "However, by the second year, once we have refined our product, established an audience, and generated effective traffic, we commit substantial resources to scale the project, ensuring its success."

Despite being a modern metropolis, Hong Kong relies heavily on analog communication tools. Applications, business correspondence, invoices, checks, contracts, and amendments are typically done on paper. This reliance on non-digital methods causes delays in delivering and transmitting documents. Additionally, checks are still commonly used for transfers and refunds. Notably, in Hong Kong, not having a paper business card can lead to skepticism and distrust.

Another important factor is the city's strong commitment to principles and traditions. For many Hong Kong apartment owners and local real estate agencies, working with Colife represents their first experience with such a business model. Colife's modern rental, management, and investment model has not been widespread or popular in Hong Kong. This unfamiliarity can lead to prolonged or stalled negotiations. However, knowledge of the Cantonese dialect proves to be a significant advantage in facilitating business discussions and overcoming these challenges.

"The specifics of a startup make it challenging to launch in any region or market," says Oleg Prachuk, Senior Project Manager of Colife Hong Kong. "However, we can definitely be proud of the local people's interest in our brand. They show great interest in the company, as this is a new phenomenon for them in the Hong Kong real estate market."

"In our niche," shared Ilnara Muzafiarova, CEO of Colife Global, "creating supply is a much more complex quest than creating demand. We secure supply by renting apartments from local owners, which presents its own nuances and challenges due to the highly conservative nature of the rental market in Hong Kong."

Colife utilizes their progressive project, Colife Invest, to expand their housing stock. They help private investors purchase apartments for subsequent rental in a co-living format. This allows Colife to offer tenants well-renovated apartments, as they manage renovations with their team of experienced repairmen and designers. At the same time, investors receive high returns in the Hong Kong market while residing anywhere in the world, as Colife handles all aspects of renting out their properties.

Colife follows a standard development plan for each region they enter. The first phase focuses on launching 10 apartments, which they aim to achieve in Hong Kong by July 2024. The target for reaching a break-even point is set for the end of the first year, with 50 apartments under their management. The second year focuses on scaling operations, with a projected fivefold growth. This is then followed by disciplined year-on-year growth of at least 100%.

According to Colife's plan, by 2025 there will be 900 units (bed spaces and private rooms) in Hong Kong, approximately equal to 300 apartments. Asia and MENA remain priority regions for Colife's development. Within five years, Colife aims to operate in 10 megapolises.

The Gulf countries, with some of the world's fastest development rates, attract young expats starting their lives anew, seeking accommodation and community. While co-living is available in Asia, it often lags behind European standards in design, marketing, and technology. Colife sees great potential to enhance the customer experience for residents and increase revenue for private investors in the region's real estate market.

Colife plans to continue allocating capital from private investors, expanding from Dubai to Hong Kong. "The next cities on our shortlist are Riyadh, Bangkok, Abu Dhabi, and Kuala Lumpur," summed up Ilnara Muzafiarova, CEO of Colife Global. "The choice is based on criteria such as expat attractiveness, high development rates, rising real estate values for both renting and buying, and favorable legislation. When making the analysis, we rely on a list of more than 50 criteria, but these are the key ones."

With a strategic approach, a focus on overcoming cultural and traditional challenges, and a commitment to growth, Colife is poised to revolutionize the co-living landscape in Hong Kong and beyond. Their success in this dynamic market will be closely watched as they expand their footprint across Asia and the Middle East.