The living room of one of the co-living spaces operated by Commontown Singapore at the 105-unit Adria, located on Derbyshire Road in the Novena area (Credit: Commontown Singapore)
SINGAPORE (EDGEPROP) - Singapore-based co-living operator The Assembly Place (TAP) has agreed to acquire Libeto, operator of the Commontown Singapore’s co-living space. The acquisition was made through a share swap, says Eugene Lim, founder and CEO of TAP.
See also: The Assembly Place raises $5.55 mil in seed funding led by Oxley’s Eric Low
The Commontown co-living brand was created by a Korean construction company, which was started in Seoul, South Korea, in early 2017. It has four locations in Seoul. When Commontown debuted in Singapore in 2018, it was considered a pioneer co-living operator from Seoul to open here.
To date, Commontown Singapore has 120 rooms across 10 locations, including Newton One and Newton 21, which are both within walking distance of the Newton MRT Interchange Station; Adria at Derbyshire Road and One Moulmein, both located in the Novena area; as well as Urbana and UE Square in River Valley. All 120 rooms in Commontown Singapore’s portfolio are fully leased to date.
One of the rooms managed by Commontown Singapore at Heritage View condo in Dover Rise (Credit: Commontown Singapore)
The acquisition of Commontown’s portfolio will increase TAP’s operational room count to over 600. Besides Commontown’s rooms, TAP is also acquiring its head leases and subleases, as well as the operations team, says Lim.
Following the acquisition, all the Commontown Singapore spaces will be rebranded TAP. “We are pleased and excited at this opportunity to work with [TAP] in changing the face of real estate in Southeast Asia and beyond,” says Ian Lau, CEO and co-founder of Commontown Singapore.
Lau and Lim were introduced to each other two months ago by a mutual friend. “We exchanged ideas and realised we had many similar views on the co-living space and on the importance of having scale to be effective,” relates Lim. “The idea of the acquisition came about during our second meeting, when we discussed how our teams can work together to achieve greater scale.”
We are pleased and excited at this opportunity to work with [TAP] in changing the face of real estate in Southeast Asia and beyond (Credit: Commontown Singapore)
Both companies have a lean team: Common- town has just five to seven staff managing 120 rooms, while TAP has a team of 12 staff managing over 500 rooms. “We both believe in staying lean to achieve operational and sales effectiveness,” says Lim. Commontown Singapore’s team also has global experience in hospitality operations, adds Lim, “which places us in a position to support our ongoing expansion”.
Lim founded TAP in 2019, starting with just six rooms. Over the past 21⁄2 years, it has grown to more than 600 rooms, including Commontown Singapore’s portfolio.
Since successfully raising $5.5 million last November — with Eric Low, deputy CEO and executive director of Singapore-listed property group Oxley Holdings, as a cornerstone investor. Since then, TAP has added close to 250 rooms to its portfolio, including securing straight leases with landlords in the River Valley, Tiong Bahru, Novena and East Coast areas.
Lim: We expect co-living rates to increase by 5% to 7% this year as Singapore’s economy recovers and the country opens more quarantine-free travel arrangements with other countries (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Another 200 rooms are in the pipeline for launch by May. Opening in April is the 181-bed, co-living hostel at 25A Perak Road and a four-storey residential block at 257 Outram Road with 12 rooms. Planning and construction are underway at TAP’s serviced apartment assets at 3 Tank Road, 272 East Coast Road and 18 Penhas Road. These are slated for launch by 4Q2022, with all three assets under management contract.
All the operational rooms in TAP are fully leased too, except for less than a handful that are currently undergoing maintenance or refurbishment works, says Lim. This brings TAP’s occupancy rate across its portfolio to 98%. To date, 60% of TAP’s portfolio is under management contract and 40% is on a straight lease model.
According to Lim, the last two quarters have seen a 7% to 10% spike in rental rates at TAP spaces, depending on location. There has also been an increase in demand from expatriates in Hong Kong. The residents at TAP’s portfolio are currently 70% expatriate and 30% local. However, with the reopening of Singapore’s borders, he reckons the profile will be 80:20 between expatriates and locals respectively.
“We expect co-living rates to increase by 5% to 7% this year as Singapore’s economy recovers and the country opens more quarantine-free travel arrangements with other countries,” says Lim. “We expect to see more demand from expatriates, which will boost leasing demand, and hence rental rates.
Check out the latest listings near Newton One, Newton 21, Adria, Urbana, UE Square, Perak Road, East Coast Road, Newton MRT Interchange Station