LHN Group’s co-living brand Coliwoo to continue breakneck expansion

/ EdgeProp Singapore |

March 24, 2022 7:30 AM SGT

Located at 40 & 42 Amber Road, Coliwoo Hotel Amber Katong (left) and Coliwoo Hotel Amber (right) are the first hotel properties launched by LHN Group’s co-living business. (Pictures by Samuel Isaac Chua/The Edge Singapore)

SINGAPORE (EDGEPROP) - Mainboard-listed real estate management firm LHN Group has spent about $90.5 million over the past three years to acquire properties in Singapore for its co-living Coliwoo brand. Currently, Coliwoo manages over 800 rooms across six properties in Singapore.

The company launched its first hotel concept under the Coliwoo brand on March 1 this year. The maiden hotel concept properties are Coliwoo Hotel Amber Katong at 40 Amber Road, and Coliwoo Hotel Amber at 42 Amber Road.

This latest launch comes as LHN works to rapidly expand its portfolio of co-living properties in Singapore and signals that it will include short-term guest stays at some of its co-living properties on top of its regular long-term residential co-living offerings.

Spate of acquisitions and repositionings

The spate of acquisitions to beef up its line-up of co-living offerings kicked off in September 2020, when LHN acquired a four-storey mixed-use building at 320 Balestier for $18 million.

In November 2020, LHN acquired two Amber Road properties at 40 & 42 Amber Road for $27 million. This pair of properties have been turned into Coliwoo Hotel Amber Katong and Coliwoo Hotel Amber.

KELVIN LIM HOTEL AMBER - EDGEPROP SINGAPORE

Lim: The long-term vision for Coliwoo is to apply the brand throughout all kinds of residential living options. He is pictured standing in front of the two new hotel concepts by Coliwoo. (Picture: Samuel Isaac Chua/The Edge Singapore)

Its next acquisition was in April 2021, when it purchased four floors of a property at 75 Beach Road for $16.8 million. About half of the space will be set aside for Coliwoo’s co-living space, while LHN will shift its headquarters into the remaining space. In that same month, LHN also bought a 30-room hotel property at 115 Geylang Road for $13.5 million.

Besides acquisitions, LHN has refurbished some of its existing property stock to accommodate co-living spaces. For example, in May 2021, LHN announced that it had completed the refurbishment of a former warehouse and office property at 1557 Keppel Road into a mixed-use space comprising offices and co-living spaces. LHN is the master tenant of this particular plot of state land.

LHN also entered into a three-year lease agreement for a residential property at 2 Mount Elizabeth Link with the landlord, Eastern Realty, in November 2021. LHN said that it intended to renovate the property and operate it as a serviced apartment under its Coliwoo brand.

Over the past six months, LHN continued to pick up more properties for its Coliwoo brand. In September 2021, it entered a joint venture with Four Star to acquire Balestier Hotel, at 471 & 473 Balestier Road, for $15 million. Four Star is a joint-venture entity that is equally owned by Singapore Handicrafts, a wholly owned subsidiary of LHN Group, and W&S Star, an independent company.

In February this year, LHN entered into an option-to-purchase agreement for a property at 298 River Valley Road for $8.5 million. The company indicated in its acquisition announcement that it intends to operate the renovated space under the Coliwoo brand.

In May 2021, LHN announced that it had completed the refurbishment of a former warehouse and office property at 1557 Keppel Road. (Picture: Samuel Isaac Chua/The Edge Singapore)

Daily and short-term co-living products

The two new hotel properties at Amber Road that Coliwoo opened at the start of this month mark the first time the co-living company is offering short-term stays at its co-living properties. This is because both sites had an existing hotel licence when LHN bought over the properties in November 2020.

Co-living is not a recognised planning typology used by URA. Instead, URA defines the minimum lease period of a residential property for residential, serviced apartments and hotels. Where residential units have a minimum three-month stay, serviced apartments can offer at least seven days, and hotels have no minimum stay requirements.

For example, The Ascott’s chain of co-living properties under its lyf brand opened its third co-living property, lyf Farrer Park Singapore, in Singapore this month. And the co-living component has planning approval as a serviced apartment.

Similarly, Singapore-listed property developer SLB and Hong Kong-based residential manager Weave Living announced their joint acquisition of Hotel Clover at Jalan Sultan for $74.8 million on March 11 this year. Weave will redesign and reposition the existing hotel into serviced apartments.

The entry of regional players and hospitality-backed co-living operators into the co-living segment in Singapore is a shift away from the fragmented market that characterised the local co-living scene a few years ago.

As the co-living market matures, LHN wants to position itself as a more service-oriented provider, expand Coliwoo’s presence islandwide, and broaden the types of residential offerings Coliwoo offers in the future, says Kelvin Lim, executive chairman and group managing director of LHN Group.

Acquisitions and master leases

This growth strategy was a factor that contributed to LHN acquiring the Amber Road hotel properties, says Lim. “When we started our co-living business, we were already positioning ourselves as being more service-oriented compared to the rest of the market. When we were presented with the opportunity to acquire these two hotel properties, we were keen to add them to our portfolio,” he says.

BLD COLIWOO HOTEL AMBER RECEPTION - EDGEPROP SINGAPORE

The reception area at Coliwoo Hotel Amber. The average monthly rate for a room at this hotel and at Coliwoo Hotel Amber Katong starts from about $2,000 to $3,500, while the nightly price for a room is about $130.

So far, LHN has grown its co-living properties through acquisitions and master leases, such as its lease for 2 Mount Elizabeth Link, says Lim. Last year, the market presented many opportunities for the company to purchase properties at very good rates for its co-living business, he adds.

Eventually, the target is for Coliwoo to have properties evenly distributed across the island to spread the brand awareness and grow its co-living community, says Lim. He also believes that co-living properties will provide a more popular alternative form of accommodation for younger Singaporeans.

For example, a young individual may choose to move into a co-living property like Coliwoo Hotel Amber Katong to have a more independent lifestyle, or a couple renovating their home in the area may move into a one of the rooms at Coliwoo Hotel Amber for temporary stay during the renovation.

“Coliwoo fits their requirements because it gives them the flexibility of shorter stays to test if the concept is suitable for them, and each room is already fully fitted with furniture and residential amenities such as washers-dryers, smart TVs and workstations,” says Lim.

Coliwoo Hotel Amber - EDGEPROP SINGAPORE

Coliwoo Hotel Amber Katong mostly offers a mix of en suite queen- and king-sized bed units. (Picture: Samuel Isaac Chua/The Edge Singapore)

Eventually, he expects Coliwoo Hotel Amber Katong and Coliwoo Hotel Amber to have residents signing leases of between six months and a year at the least, with the expectation that some will sign recurring yearly leases over time.

The average monthly rate for a room at Coliwoo Hotel Amber Katong and Coliwoo Hotel Amber ranges from about $2,000 to $3,500, while the nightly price for a room is about $130.

Coliwoo Hotel Amber Katong is a two-storey building which typically offers en suite single-sized bed units. Coliwoo Hotel Amber mostly offers a mix of en suite queen- and king-sized bed units. Residents of both properties will have equal access to shared facilities on site such as an all-day laundromat, communal lounges and rooftop garden.

Both properties feature contemporary interior designs and a modern Peranakan-inspired theme that reflects the heritage of the Amber Road area. Local mural artist Sam Lo was brought in to paint the colourful murals on the façade and interiors. He also painted the murals at two other Coliwoo locations at 1a Lutheran Road and 1557 Keppel Road.

BLD COLIWOO HOTEL AMBER KATONG ATRIUM - EDGEPROP SINGAPORE

Local mural artist Sam Lo designed and painted this mural at Coliwoo Hotel Amber Katong. (Picture: Samuel Isaac Chua/The Edge Singapore)

Expanding Coliwoo’s product range

Looking ahead, Lim says that LHN plans to expand the types of residential offerings under its Coliwoo co-living brand.

“While Coliwoo is known today as a co-living brand, our long-term vision is to apply it throughout all kinds of residential living options that we can offer. We currently offer residential co-living, serviced apartments,student accomodation and our recently launched hotel offering. In the future, we will have other forms of co-living such as senior accommodation,” says Lim.

While the real estate management company has not firmed up any plans to break into senior living just yet, Lim says that it is the company’s long-term goal to apply its Coliwoo brand throughout a wide range of residential options.

“This means that moving forward, when we are presented with the right opportunity and we feel that the company is ready, we will take on other residential segments and establish our brand there,” says Lim.

common room and laundry area at Coliwoo Hotel Amber - EDGEPROP SINGAPORE

The common room and laundry area at Coliwoo Hotel Amber. (Picture: Samuel Isaac Chua/The Edge Singapore)

He reckons that senior living will be the first new area the company will break into in Singapore. This segment has a significant growth potential as the proportion of seniors living in Singapore grows over the next few years, he says.

This Coliwoo senior living concept will not be the typical nursing home, or old folks’ home, that most Singaporeans are familiar with. Instead, the concept will be for seniors who can live independently and desire a more convenient environment with adequate healthcare services as well as a vibrant community to keep them engaged, says Lim.

Residential may overtake LHN’s traditional strengths

With already more than $90.5 million sunk into developing LHN’s Coliwoo brand over the past three years, Lim says that it is possible that revenue contributions from its residential businesses eventually match or even outpace LHN’s industrial, commercial and facilities management businesses.

LHN has traditionally been known for its strong and established presence in the industrial, commercial and facilities management real estate sectors in Singapore. According to its 2021 annual report, the firm has seven commercial properties, including 10 Raeburn Park where it houses its headquarters. It also has 13 industrial properties with an average occupancy rate of about 93%. (Find Singapore commercial properties with our commercial directory)

In addition, it has a container depot business in Singapore, a logistics transportation service, and facilities management including cleaning services and carpark management in Singapore.

LHN’s 2021 annual report shows that its residential business, including co-living, pulled in revenue of $11 million in FY2021 (which ended on Sept 30, 2021), compared to $9.2 million in FY2020. Contributions from its industrial business brought in $17.6 million in FY2021 against $26.9 million in FY2020, and revenue from its commercial properties amounted to $7.7 million in FY2021 compared to $15.6 million in FY2020.

Coliwoo Hotel Amber room - EDGEPROP SINGAPORE

One of the queen-size bed co-living room at Coliwoo Hotel Amber. (Picture: Samuel Isaac Chua/The Edge Singapore)

“We are also aggressively trying to grow our other segments. Our current goal for the co-living business is to achieve 2,000 units by the end of next year,” says Lim. Apart from the 800 units it manages in Singapore, Coliwoo has a pipeline of more than 10 properties over the next two years, representing nearly 1,600 keys, as part of its aggressive expansion plans. (Check all latest Singapore property Market Trends)

It has six more properties that it plans to launch by the end of this year: Coliwoo 75BR at 75 Beach Road; Coliwoo Hotel Balestier at 471 Balestier Road; Coliwoo Hotel Gayworld at 115 Geylang Road; Coliwoo Serangoon 450 at 450 & 452 Serangoon Road; Coliwoo Orchard at 2 Mount Elizabeth Link; and Coliwoo River Valley 298 at 298 River Valley Road.

“LHN Group has strong experience in space optimisation, leasing out relatively bare spaces by the area. But going forward, we want to provide real estate as a service. This means moving away from competing in the market based on the most attractive psf price, and towards a service-oriented approach to real estate management,” says Lim.