Hong Kong’s Weave Co-Living to invest $500 mil in Singapore via JV
Hong Kong-based Weave Co-Living, a lifestyle-focused rental accommodation provider, is making its debut in Singapore with a planned investment of $500 million. It has found a partner in Singapore-based fund management firm 32RE.
Weave will hold an 80% stake in the joint venture, while funds managed by 32RE will hold the balance 20%. Together, both partners are committing a total equity of $150 million.
“I believe Weave will provide a breath of fresh air to the rental market and co-living scene in Singapore,” says Sachin Doshi, founder and chairman of Weave.
While most co-living operators in Singapore have an asset-light strategy, Weave believes in owning assets. “Our business model is very different and the barrier to entry is high. We are a lifestyle company, but we believe in owning real estate,” says the 40-yearold Doshi.
‘OWNER-OPERATOR’ MODEL
Weave’s owner-operator business model offers several key benefits, says Jeremy Choy, CEO of 32RE, Weave’s joint-venture partner in Singapore. “Under this model, they are fully in control of all aspects of the repositioning and operation of the property,” he says. “By operating dedicated co-living properties, we believe that Weave can offer its residents a more bespoke community and living environment, which should benefit our joint venture.”
The business model offers upside potential in terms of stable cash flow from property operations, and downside protection through ownership of the underlying assets, Choy notes. “This, we feel, is important because while the growth of co- living in Singapore in recent years has been encouraging, we believe that there are certain gaps in existing ‘asset-light’ operating models,” he says. “These may include the difficulty in managing increases in real estate cost from rental increases and the continued availability of the property when the existing lease expires.”
Doshi has adopted his asset- heavy strategy in Hong Kong since Weave’s inception in 2017. Based in Hong Kong, he was the former head of Asia Pacific real estate for APG Asset Management, the asset manager of the Dutch pension fund giant.
After leaving APG, Doshi originally founded Emerald Lake, a real estate private equity firm, in a joint venture with a Hong Kong family in 2017. With an initial funding of US$60 million, they acquired a hotel in Sham Shui Po in Kowloon next to Prince Edward MRT Station. The property was refurbished and repositioned as the 160-unit Weave on Boundary. Within just three months of opening in August 2018, it achieved an occupancy rate of 95%.
That attracted the attention of New Yorkbased private equity firm Warburg Pincus, which invested US$ 181 million in the oneyear-old company in November 2018. It also has an option to invest a further US$ 232.5 million as Weave expands its footprint to other major gateway cities across Asia Pacific. After Singapore, Doshi has set his sights