SINGAPORE (EDGEPROP) - Hong Kong and Singapore, rival finance hubs in Asia, may have vastly different housing markets, but one thing they share in common is a relative abundance of co-living options.
Last year, a study by Knight Frank ranked Hong Kong as fourth and Singapore ninth among 20 Asia-Pacific cities that are likely to see growth in the co-living segment. The study tracked attributes such as housing affordability, university population, venture capital deals and quality of life.
Analysts and operators said both markets were “doing well” and “relatively successful”, with occupancy rates of between 80 and 90 per cent in Hong Kong and over 90 per cent in Singapore as recently as July. This despite a pandemic that has crushed the global economy and caused unemployment on a massive scale. At the peak of the first wave of the outbreak in Hong Kong in the first quarter, co-living operators said they had to slash rates between 15 and 50 per cent to keep tenants.
Some operators like Weave Living decided to ride out the pandemic, making a conscious decision not to accept new tenants in Hong Kong between March and May for the safety of their existing tenants and staff.
“We see both markets being resilient for the co-living sector given the nature of accommodation being one of the basic needs, and our co-living offering, and the industry in general, being an attractive and competitive one,” said Aaron Lee, founder of Dash Living, which operates co-living units in Hong Kong and Singapore.
Founded in Hong Kong in 2014, Dash first operated serviced flats and a hotel before venturing into co-living space in the city. It expanded its co-living business into Singapore in January and now has more than 1,000 units in the two cities.
The company said it enjoys a 90 per cent occupancy rate in both cities despite the pandemic.
“Demand for inner city living especially from the millennial workforce, as well as a strong gig economy, are the key reasons for the co-living market to be relatively successful,” said Desmond Sim, head of research for Singapore and Southeast Asia at CBRE.
Despite the housing markets of both cities being vastly different, their co-living sector is thriving. While 90 per cent of Singaporeans own homes compared with only 50 per cent in Hong Kong, Singapore’s co-living success is all the more surprising, said Sim.
Housing standards are also different. Hong Kong’s Urban Renewal Authority stipulates that home sizes should be at least 300 square feet (27.9 square metres), while average size of Singapore’s privately owned homes is three times larger at 915 sq ft.
But there are similarities too. Both Hong Kong and Singapore are among the world’s most expensive cities to own a home, ranking first and third, respectively, according to CBRE’s Global Living 2020 report released in April. Both cities also have a sizeable expatriate population and their universities are among best in the region, attracting large numbers of international students.
It is against this backdrop that other Hong Kong co-living companies are eyeing Singapore.
Sachin Doshi, Weave’s founder and group CEO, said that the company will expand into Singapore next year and is looking to acquire five to six properties with a local partner.
“In Hong Kong, we have a 50-50 [mix] of locals and expats as tenants, [but] in Singapore we expect maybe a higher proportion of expats, 70 per cent, and 30 per cent of locals,” said Doshi, alluding to Singapore’s high home ownership rate.
“Generally speaking the dynamics are similar – both are expensive cities to own real estate in [but] very attractive cities when it comes to global talent,” Doshi said.
The company opened Weave on Anchor its third co-living property in Hong Kong this week. The 35,000 sq ft property in Tai Kok Tsui, Kowloon, is its largest and contains 193 private living units.
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