Millennials Drive Co-Living Trend In Hong Kong And Singapore

“We’ve never missed the 90% occupancy rates for the last eight years, anywhere,” says Aaron Lee, the founder of Hong Kong-based co-living company Dash Living.

Even during the pandemic, Lee says his 8-year-old company managed to maintain rates of between 90% and 95% for the 2,000-plus rooms at the eleven properties he runs in four markets: Hong Kong, Singapore, Japan and Australia.

By comparison, the occupancy rate of 5-star hotel rooms in Hong Kong has improved to 56% from a year ago, a 15% increase, in the year to August, according to industry consulting firm Knight Frank.

Dash Living’s tenants are typically offered their own bedrooms and then share kitchens, laundry facilities and communal lounges. The company says it can offer flexible rental agreements that can be as short as a single month, and its rates can be adjusted to reflect current market conditions.

The co-living trend has emerged as a solution with particular appeal for budget-conscious millennials in metropolises like Hong Kong and Singapore, where housing costs are higher on average. The two cities have seen a slew of conversions of hotels into co-living properties, mixing private rooms with shared communal areas.

“One reason is the stark rise in residential rents across the region over the past few years,” says Noel Neo, Head of Singapore Mid-Markets, JLL Hotels & Hospitality Group. “In the case of Hong Kong, another factor is the income loss of underperforming hotels which were first hard-hit by social unrest and subsequently by the pandemic.”

Buyers in Hong Kong were able to purchase hotels at a 20% to 40% discount on the pre-Covid price, according to data from the latest JLL Capital Tracker. “Hotel owners, reeling from the impact of the pandemic, were also more open to selling properties that they closely held previously,” Neo says.

In Singapore, the zeal for investing in co-living has continued unabated. “Hotel prices have remained largely unchanged since the pandemic. Even with the tourism recovery, a drop off in demand for co-living conversions on a purchase-to-convert basis appears unlikely,” says Neo.

Lee’s Dash Living is vying with Weave Living, founded in 2017 by former banker Sachin Doshi, for the region’s leadership role. Both have expanded aggressively in the region through acquisitions.

For its part, Dash Living has raised $18.8 million since its founding. Lee remains the company’s largest shareholder. Hong Kong-based Mindworks Venture, the largest non-founder shareholder, came in October 2019.

Starting with an old building with twelve rooms in Tsim Sha Tsui in Hong Kong’s Kowloon downtown, he marketed them on Facebook. He found his first customers in the U.S. They were three university students searching online for accommodation in Hong Kong to work as interns at Li & Fung, which would later reimburse them for the expenses.

Lee’s secret sauce is a combined deployment of technology and targeted marketing via websites and social media to pre-sell the available spaces.

“Our technology is very mature. The prices are adjusted against the market to ensure the rooms are booked. The prices move according to the room availability. We find the right customer with the right price,” he says.

His successful recipe also includes trendy services: community-driven online and offline events, including wine tasting, and abundant complimentary amenities, the most popular of which is gym memberships with outside operators. “Living is a necessity, it’s very sticky, and we do long stay,” he adds.

Six months-plus is considered long-term in hospitality; Dash Living’s typical leases with tenants average ten months, proof that co-living is far from an impulsive move.