Weave, LaSalle Buy Tower in Hong Kong’s Mid-Levels for $35M

Residential investor and operator Weave Living has acquired its fourth property this year, picking up an apartment tower in Hong Kong’s Mid-Levels for HK$275 million ($35 million) via a joint venture with LaSalle Investment Management, according to a statement by the Warburg Pincus-backed firm.

Weave and LaSalle bought Wai Yan Court, a 25-unit tower at 68 Robinson Road in the upscale residential district popular with bankers and other financial services executives as the first deal inked under a $140 million equity JV. Now the partners plan to renovate the property into the one-time co-living operator’s first property offering two-bedroom homes, as the firm led by chief executive Sachin Doshi continues to expand its list of capital partners and range of living offerings.

“With a proven track record for delivering bespoke acquisition opportunities in desirable locations that reap outsized returns, Weave Living is proud to have once again obtained strong capital support from a highly accomplished partner in LaSalle,” Doshi said in a statement. He added that, “With this latest acquisition, we further diversify our product offering and capital relationships to capture a broad set of opportunities in the rental accommodation asset class in Asia Pacific.”

The joint venture is Weave’s third major tie-up with an international capital partner to be announced in the past five months, following agreements with Angelo Gordon and PGIM Real Estate announced earlier this year, with the three deals having a combined investment capacity of $1.1 billion, as global investors continue to turn to multi-family residential investments in search of durable returns.

Going Big

Completed in 1999, Wai Yan Court is set to start a new life under the Weave Residences brand which the company rolled out last year as part of an expansion into providing larger homes for long-term rental accommodation.

“In line with an increased demand for more spacious yet practical residences in the mid-upscale home sector, we will transform the Robinson Road property into 25 two-bedroom apartments which will showcase the ethos of the Weave Residences brand,” Doshi said. Weave will act as the asset manager, development manager and operator for the 25-storey tower.

Industry sources informed Mingtiandi that Wai Yan Court measures 26,640 square feet (2,458 square metres) by gross floor area, which would bring the purchase consideration to HK$10,393 per square foot. The property, which formerly belonged to a locally family, occupies a 2,202 square foot site on a 999-year leasehold which started from 1859.

The company introduced its first Weave Residences property at 6-8 Hospital Road in the Mid-Levels – around 10 minutes’ walk to the west of this latest acquisition – in August of last year, and has now leased all 48 units in the facility. With this latest deal Weave has grown its portfolio to 10 properties with a total of 1,500 units across Hong Kong and Singapore.

In the last year Weave has now raised $380 million in third party equity, the company said, adding that, upon full deploy of its joint venture commitments it will have grown its assets under management to $2 billion.

The company expects to begin leasing units at the 68 Robinson Road property in the second quarter of next year as the neighbourhood just down the hill from Victoria Peak sees a wave of redevelopment.

Since November of last year builders including Henderson Land Development and Lai Sun Development have acquired at least three major projects along Robinson Road, with Norman Ng, the founder of private equity firm Oriens Capital, having acquired 86 percent of the space in Yin Yee Mansion just across the street from Wai Yan Court in November last year for HK$900 million.

Betting on Beds

For LaSalle, which has made multi-family residential investments one of its primary targets globally, the investment with Weave allows the firm to expand its bets on the sector’s future into more Asian markets after earlier deals in mainland China and Japan.

“We are pleased to work with a best-in-class developer and operator in rental accommodation solutions like Weave Living to continue building our portfolio of multi-family residences in Hong Kong and Singapore,” said Claire Tang, co-chief investment officer for Asia Pacific and head of Greater China for LaSalle.

The joint venture, which has a total investment capacity of $400 million, comes around nine months after LaSalle, together with local partner Jingrui Holdings, closed on an acquisition of a retail and hotel property in western Shanghai’s Hongqiao area which it has set out to convert into a rental residential project.

The Chicago-based firm has also made a number of multi-family investments in Japan, including acquiring seven residential properties in Osaka and Nagoya late last year as part of a JPY 17 billion ($123 million) deal which also included a warehouse in Tokyo.

Weave’s joint venture with LaSalle comes after the five-year-old residential specialist had earlier this year formed a joint venture with US fund manager Angelo Gordon which in May purchased a hotel in Hong Kong Island’s Western district for HK$900 million for conversion into apartments,

In April Weave had teamed up with PGIM Real Estate to pick up the 435-room Rosedale Hotel in Kowloon for HK$1.37 billion through a separate joint venture with the property fund management division of Prudential Financial.

Weave entered the Singapore market in March of this year with the S$75 million ($56 million) acquisition of a hotel in the city-state’s Bugis area through a joint venture with listed builder SLB Development, with Doshi saying at the time that the company plans to expand into Australia as it becomes a regional player.