HONG KONG PORTFOLIO
In Hong Kong, the roll- out of the maiden Weave on Boundary was followed by the second property, the 95-unit Weave on Baker in the Hung Hom area, which opened in November 2019. The property is located within a seven-minute walk of the Hung Hom MTR Station and is near Kai Tak ( the former airport), a major gentrification area served by the upcoming Kai Tak MTR Station on the Sha Tin to Central Link.
The third property in Hong Kong, Weave on Anchor, is slated to open in August. The 200- unit property is the largest in the portfolio to date, in terms of number of units, says Doshi. The property is located in Tai Kok Tsui and within a five- minute walk of the Olympic MTR Station. It is a refurbishment of a former hotel on Anchor Street in West Kowloon.
In the pipeline is a fourth property, the 120- unit Weave Suites on Queens in Sheung Wan, a hipster neighbourhood on Hong Kong Island.
In Hong Kong, Weave has focused on acquiring hotels, serviced apartments and residential properties en bloc at or below land cost. It then adds value by refurbishing and repositioning these assets to enhance both return on investment (ROI) and capital values, according to the firm. Today, the company owns and manages a portfolio of six properties with over 600 rental units in Hong Kong, valued at about US$300 million ($416.6 million).
Based on its existing portfolio in Hong Kong, Weave has a proven track record in terms of increased length of stays — from 2.5 days as a hotel or three months as a serviced apartment in the past, to an average of 10 to 12 months under Weave’s rental accommodation model. Net operating income margins improved 15% to 20% subsequent to the makeover. Occupancy rates averaged more than 92% last year, says Doshi.
Weave has also been able to optimise expenditure through the introduction of digitalisation tools such as wireless door key access and residents’ app for rental payment, booking of events and additional services. Repairs, security, cleaning and other services have been centralised to serve multiple properties. As such, Weave has been able to keep a lean team of just 36 to date.
MAJORITY STAKE
stability relative to hotels. Return on investment (ROI) for stabilised Weave co-living assets is in the range of 4% to 4.5%, reckons Doshi, which is higher than the 2% to 3% ROI for the typical residential rental and hotel assets in Hong Kong today.
According to Doshi, about 90% of the residents in Hong Kong’s Weave properties are professionals and only 10% are international students. The split between expatriate residents and locals is 60% to 40%.
Doshi. The firm has appointed Kemmy Sim as vice president of operations to lead the team in Singapore. Sim was formerly head of operations at Login Apartments, a co-living operator in Singapore which had its origins in Shanghai and was formerly known as Mamahome.
32RE will be the acquisitions and project manager for the joint venture in Singapore, says Choy. “We will draw on our experience and network in Singapore to acquire and deliver the properties to Weave’s design and brand specifications for them to operate,” he adds.
The joint venture’s strategy will be similar to the one adopted by Weave in Hong Kong. “Covid-19 has brought about many challenges for the tourism sector in Singapore,” adds Choy. “We see opportunities for us to valueadd by potentially acquiring hospitality assets for conversion to co-living.”
Besides hospitality assets, Weave will also consider residential en bloc opportunities. “We are very open- minded,” says Doshi. “With our joint venture in place, we can explore opportunities together.”