Investors turn Hong Kong hotel assets into co-living space on higher occupancy, profit appeal
- Warburg Pincus-backed Weave Living and Dash Living are among some of the active co-living operators in recent deals
- CBRE sees room for more conversion of hotels, higher co-living occupancy rate as the Covid-19 situation stabilises
The city could see about US$300 million worth of real estate transactions involving hotels this year, JLL estimated, with the vast majority of them earmarked for conversion into co-living purposes. The volume may increase to US$500 million next year, it said.
One notably aggressive player is Weave Living, a co-living operator backed by US private equity firm Warburg Pincus, which JLL said is planning to add to its five operating properties in Hong Kong. Dash Living last week unveiled its newest facility in Mong Kok, adding to its current offerings in Hong Kong, Singapore, Sydney and Tokyo.
“We can expect the co-living sector to keep growing in the coming years as many operators are backed by institutional capital looking for high paced growth,” said Corey Hamabata, senior vice-president at JLL Hotels and Hospitality Group.
Weave Living bought a hotel building in Kai Tak, Kowloon in August for about HK$380 million (US$49 million), which is very likely to be converted into a co-living project, according to CBRE. It will add to its current offerings at Prince Edward, Hung Hom and Olympic.