Written by Kieron Monks, CNN

It seems like a regular room, with a minimal aesthetic and laminated wooden flooring.

But at the touch of a button, the kitchen disappears. The dining table and chairs sink into the floor, while a king-sized bed descends from the ceiling and a cinema screen opens out of the wall.

YO! Home is a box of tricks that aims to offer a solution to the challenge of constrained living space in cities by transforming one room into five.

The 40 square meter studio apartment alternates between a lounge, kitchen, dining room, bedroom, and office, with storage space beneath the floors and a separate bathroom.

The concept is made possible by a network of counter-weights that moves furniture in and out of the walls, floor and ceiling on request. Moving parts are equipped with sensors to ensure they do not collide with the occupant.

"I've been involved with theater and designing the stage for shows - the mechanics of stage scenery are magical," says YO! Company founder Simon Woodroffe, who also created the popular sushi chain YO! Sushi.

"I wanted to use mechanics to make a small studio apartment of around 400 square feet into three or four rooms, because otherwise these apartments are divided into tiny rooms with no space."

The design was first announced in 2012 and has gone through several prototypes since. Now, work is underway with developers to roll out the finished product in the northern English city of Manchester.

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The prefabricated apartments will cost around £150,000, and they can be stacked on top of each other for fast and easy construction, which Woodroffe hopes will enable high rise blocks around the world.

"I don't see why we shouldn't have 40 floors of them in Hong Kong and New York," says the British entrepreneur. "Everything has to be for a world market and where land is expensive, property developers can make money from YO! Homes."

Making space efficient

Rapid growth in the world's major cities -- the majority of the global population now live in urban areas - has forced developers to find more efficient uses of space.

Micro homes are finding a niche in London , and former New York Mayor Mike Bloomberg has supported micro design by relaxing laws on the minimum size of apartments.

"The demand for housing is not abating, so thinking about density and efficiency is key," says Sarah Watson, deputy director of the Citizens Housing & Planning Council in New York. "We need a new way of looking at space."

Watson is exploring the potential of micro and transformable homes and believes that changing lifestyles have reduced space requirements.

"In big cities people blend their public and private life, so the city is used as an extension of the home," says Watson. "People are more likely to eat and socialize outside rather than at home. The change has already come and the (living) spaces are catching up."

The planning expert adds that a steep rise in single living -- an estimated 27% of Americans now live alone, according to census data -- has increased demand for small solutions.

Technology advances have also reduced the need for cumbersome furniture such as bookshelves and home computers, Watson adds.

Homes that adapt to you

Others at the sharp end of the micro-home industry believe tech developments will only create further exciting efficiencies and neat features in years to come.

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Living space is likely to become much smarter, predicts Nimish Biloria, a professor of architecture at the Netherlands' TU Delft University.

Biloria oversaw a ' Swiss Army knife ' home design that used flexible polypropylene walls to make numerous configurations possible, and wants to enable "dialogue between you and your architecture."

"We have already shown advanced robotics, and the issue is how to go further," says Biloria. "We can work with AI (artificial intelligence), facial recognition systems that adapt the environment to your mood, and many other possibilities...If I come home with an unexpected guest, the house should condition itself to be appealing."

Such futuristic solutions may be some years away, but an IKEA-sponsored project is preparing to hit the market with transforming technology that emphasizes convenience, functionality and ease of use.

The CityHome from MIT's Changing Places group takes a "disentangled" approach - using a single piece of furniture that morphs into an office, kitchen, party space, shower and more, within a conventional apartment.

"(Transforming) solutions need to be designed as furniture to allow for retro-fitting and new construction," says Kent Larson, director of Changing Places. "They also need to be effortless to be sustainable for daily life -- almost magical. Transforming your apartment should be as easy as opening a door."

Larson is targeting two key sectors of the market: millennials willing to sacrifice space for location, who are interested in new technologies and able to afford them, and older or vulnerable people benefiting from an adjustable environment tailored for their safety and comfort. He predicts demand for "hundreds of thousands" of units.

The architect believes that developers and politicians now recognize that new, affordable spaces are essential for maintaining the cultural and economic health of cities, which will ensure that micro solutions reach the market in significant numbers.

Larson hopes to eventually integrate transport and zoning with communities of the transformer homes, to create a network that is optimized for efficiency and resources. He also expects transforming features to spread to the luxury market:

"It's the same logic for a penthouse. The initial applications will be for micro units but then it will spread more widely."

The competition is equally confident that a new era is upon us.

"People will look back and say: 'do you remember when a room could only do one thing?" says Simon Woodroffe.