The Assembly Place bolsters co-living market share
By Charlene Chin
/ EdgeProp Singapore |
SINGAPORE (EDGEPROP) - Over just two years, co-living operator The Assembly Place (TAP) has expanded rapidly. From just six rooms in a landed house in the Orchard neighbourhood, the business has grown to about 350 rooms across 10 assets in the city-state, with a 98% occupancy rate. (See also: LHN revamps 1557 Keppel Road into office and co-living spaces)
The communal space at 96 Owen Road (Credit: Samuel Isaac Chua/ The Edge Singapore)
TAP’s largest property is Mill@32 at Lorong 32 Geylang, with 150 rooms. This is also its most popular property. At $1,000 a month, this has attracted members in their early 20s, comprising a majority of Malaysian Chinese tenants, says Eugene Lim, founder and CEO of the co-living business.”The price is equivalent to that of renting a public housing room,” says Lim, who believes cost is the main pull factor of the offering’s popularity.
As a standalone development, Mill@32 hires its own handyman and cleaners. There is also a communal area called the Workshop, where members can choose to work from. But the area is also equipped with a soccer table and television set.
The Assembly Place has grown to about 350 rooms across 10 assets in the city-state, with a 98% occupancy rate over just two years (Credit: Samuel Isaac Chua/ The Edge Singapore)
Spacious rooms, practical fittings
Across all of TAP’s properties, Lim has made sure that the rooms are spacious enough, and each common bathroom is shared between two rooms. For rooms that cannot fit a washer and dryer, TAP ensures that no more than two rooms share one washer and dryer at any one time. “We try to make the rooms as self-sufficient as possible and large enough to fit a queen-sized bed,” he says. TAP plans it such that an apartment accommodates either female tenants or male tenants, unless members do not mind co-living with the opposite sex.
TAP’s offering at 96 Owen Road comprises 20 rooms of about 250 to 300 sq ft across two floors. These units come with an attached bathroom, pantry, study table, washer and dryer, at monthly rates from $2,500 to $2,800. “We have a lot of people coming into our Owen Road properties. And when they hear that the rate is $2,500 a month, even though the locations are not prime, they tell me that the rate is not too expensive,” shares Lim.
At monthly rates of $1,000 per room, Mill@32 is The Assembly Place’s most popular offering (Credit: The Assembly Place)
There is also a spacious communal space, housing sofas, work tables and a pool table. “With the correct space planning, that’s when people can naturally mingle. You have your pool table, workspace, communal kitchen, and wine chiller, [which creates] pockets of opportunity for people to mingle together. And if they don’t want to mingle, they want privacy and just want to focus on their work, they can always retreat back to their room,” says Lim.
He has observed that members prefer having their own washer and dryer and their own fridge, especially due to Covid-19. “But they don’t mind sharing the kitchen and the communal areas, [although they still] value their privacy,” he adds.
“If we price our rooms at $3,000 to $4,000, then tenants will prefer to stay in a private apartment, where they can have the whole apartment to themselves,” says Lim.
At 144 Owen Road, room rates average $2,000 a month. These rooms are smaller, sans a pantry space, but come with their own washer and dryer.
The shared workspace at Mill@32 comes with a soccer table and television (Credit: Samuel Isaac Chua/ The Edge Singapore)
Real estate experience
Lim’s background in real estate has lent him an edge in building up TAP. “My past experience starting from the ground as a salesperson 15 years ago doing sales and leasing, to being part of an international property consultancy like Knight Frank and listed company Oxley, helped me in understanding what is lacking in today’s market in real estate supply, demand, product and design,” he says.
About 95% of TAP’s current portfolio currently runs on 5+5 years management contracts, as opposed to a leasing model. This lowers business risk especially during downtimes, and provides much more leeway to the business. TAP’s offerings are mostly owned by high-net-worth individuals and family offices. Lim says that their returns are actually “much higher” while on a management contract, as opposed to a leasing model, with yields ranging from 4.5% to 5.5%, and in some cases, 6%, he shares.
“While landlords are looking at maximising rental returns, my experience helped them to understand what needs and need not be done to their assets to achieve the highest possible return,” he says. “During the design phase, it is also important not to over-design, which will result in a higher capex, lowering marginal returns.”
Units at 96 Owen Road come with an attached bathroom, pantry, study table, washer and dryer, at monthly rates from $2,500 to $2,800 (Credit: Samuel Isaac Chua/ The Edge Singapore)
Beyond numbers, Lim adds, the company also “looks at the layout of these ageing asset floorplates, immerse ourselves in space planning and create a product we are confident that tenants will accept”.
When TAP takes over an asset, it plays the role of development manager, overseeing and managing contracts, space planning and design, and the construction and fitting out of the property. Once the property is purpose-built and ready for the public, TAP then tackles leasing, which involves marketing the space to attract members. Its final and ongoing role is one of a property manager. “It’s a one-stop solution,” says Lim, “where we will help the owner to manage the property”, ensuring, for instance, that the lift maintenance guy comes on time.
The company tries to ensure each room is large enough to fit a queen-sized bed (Credit: Samuel Isaac Chua/ The Edge Singapore)
Origin and trends
TAP started off purely from an investment perspective and as a “social experiment”, says Lim. Back in May 2019, he signed a lease with a friend for a landed property along Jalan Elok. The friend had found it difficult to rent out his house for $6,000 a month. Lim managed to negotiate a monthly rent of $5,500, and decided to spruce up the property. “I spent a bit of money on renovation, and after the place was ready, in two weeks, we managed to lease out [all six] rooms,” he recalls.
Lim called his business The Assembly Place, drawing on memories of his life as a student when he had to attend school assembly each day. The assembly gathered all students into one space, which he likens to the idea of co-living: “TAP is really about the gathering of people, where people from all kinds of background, culture, come together, and where ideas are actually disseminated.”
Lim: The Assembly Place is really about the gathering of people, where people from all kinds of background, culture, come together, and where ideas are actually disseminated (Credit: Samuel Isaac Chua/ The Edge Singapore)
To date, TAP has housed close to 1,000 tenants. Before Singapore enacted its “circuit breaker”, the occupancy rate hovered around 85%, but after that, there was a jump to around 98% consistently.
One clear trend is the increase in locals staying in co-living properties. Before Covid-19 hit, 90% of TAP’s members were expatriates, but now there is a ratio of 70:30 for expatriates to Singaporeans, says Lim. Some local families have also rented TAP properties due to their new-built projects being delayed.
The Assembly Place’s offering at Jalan Jintan is a seven-minute walk from Orchard MRT Station (Credit: The Assembly Place)
TAP targets to hit 800 rooms by the end of this year. Currently under renovation are a row of shophouses at 138–142 Jalan Besar, and 257 Outram Road which will be a boutique hotel, says Lim. “Talks are currently underway to secure another five assets. If successful, TAP will have close to 600 rooms by September this year with a total asset value of $250 million,” he says.
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