Hillhouse’s Rava Takes Majority Stake in Dash Living With $150M Investment Plan

With Asia Pacific’s living sector becoming a top target for real estate investors globally, Rava Partners is taking a majority stake in a rental housing platform that now manages some 2,000 rooms across the region.

The real estate division of Hillhouse Investment is committing up to $150 million to growing Hong Kong-based Dash Living, according to a statement by the two companies on Tuesday, with Rava’s leadership pointing to the management firm’s market traction as a key factor in the deal.

“We are highly impressed with Dash Living’s growth trajectory and management expertise,” said Joe Gagnon, co-head of real assets at Rava Partners. “We are excited to support Dash Living in its next phase of development and are committed to elevating it to become the leading living sector asset management platform in Asia Pacific.”

With Dash now managing over 2,000 rooms across the region, the deal comes less than two months after the company expanded its Japan presence to 19 locations through agreements with US multi-family leader Greystar and BlackRock.

Growing the Team

The deal aims to transform Dash Living into a fully integrated living sector asset management platform, further accelerating its growth in APAC including Japan, according to the statement.  Following the investment, Aaron Lee, CEO and founder of Dash Living, will continue to lead the company as CEO and board member to oversee its investments and operations.

Specialising in leveraging systems that can help owners of residential assets to potentially double net operating income, Dash manages accommodation which can either be leased on a monthly basis or made available short term for tourists and business travellers.

“It’s about technology, it’s about how you can get the net operating income higher. For the flexible long stay bucket, you can probably get two to three times uplift from traditional leases,” Lee said in an appearance at the MIngtiandi Tokyo Forum last year. “For tourists, three to five times, depending on the season. You take off maybe 25 percent to 35 percent operating costs, you probably have two times uplift on a net basis, compared to a traditional lease.”

First established in 2014 and already backed by MindWorks, Grosvenor and Hong Kong’s Cyberport, Dash sees the Rava investment as helping it both to grow its services and allowing it to put some investment into projects alongside its capital partners.

“Use of proceeds will be primarily used for growing our management team and investing alongside with our partners to create strong alignment of interest,” Lee said in a statement. The veteran entrepreneur told Mingtiandi that he sees the investment allowing Dash to expand its geographic reach while also expanding its services to new formats, including managing properties catering to families and groups.

With Rava investing in the management business, Dash expects to continue working alongside fund managers such as BlackRock, PGIM Real Estate, Hines and Greystar as it expands its operations and investments.

Japan Opportunity

With Rava having teamed up last year with Daiwa Securities Group in a JPY 169 billion (then $1.13 billion) deal to privatise Samty Holdings that closed in November, the Dash investment gives the fund manager a chance to boost its returns from its ownership of Japan’s largest residential developer.

“We are particularly enthusiastic about the growth opportunities in Japan where we see strong secular tailwinds and where Dash Living has demonstrated significant value creation for its customers and capital partners,” Rava’s Gagnon said.

Samty is estimated to develop around 100 buildings annually in Japan, creating inherent synergies for Rava to match Dash’s management systems and capabilities with a slice of the builder’s rental housing portfolio.

With Dash having 19 of its 34 locations in Japan, Lee estimates that Asia’s second-largest economy accounts for around one-quarter of its rooms. Japan now represents around $150 billion of the $200 billion to $225 billion value of Asia Pacific’s multi-family market by some estimates, providing ample room for expansion in a sector where many investors see significant growth potential.

While Japan may rank as first priority for Dash and Rava, the companies are expected to look for opportunities to expand the business into Singapore, Hong Kong, Australia and other markets around the region.