Weave Moves into Multi-Family With Buy in Hong Kong’s Mid-Levels

A Warburg Pincus-backed residential startup has plans for its first apartment complex in Hong Kong’s upscale Mid-Levels after buying a property for HK$295 million ($38 million).

Weave Living, which moved beyond its co-living roots in mid-2020, has already begun refitting 6-8 Hospital Road in Hong Kong to become its first traditional rental apartment property when it opens in July of this year.

“We went from being Weave Co-Living to Weave Living and that was very deliberate as we had started seeing more opportunities in the serviced apartment as well as in traditional multi-family space,” Weave founder and chief executive Sachin Doshi told Mingtiandi.

After acquiring its fifth Hong Kong location in December, Sachin Doshi, who founded Weave in 2017, expects to add three to four more assets to the company’s portfolio as the market for multi-family rental residential properties expands in Asia’s core cities.

Building a Multi-Family Portfolio

Weave’s newest asset is its second on Hong Kong island with Doshi’s team acquiring the 24-storey tower in mid-December. Formerly the Mier Serviced Apartments, the property just a few doors away from the Hop Yat Church on Bonham Road measures 20,927 square feet (1,944 square metres) by built area, and occupies a 2,225 square foot site.

“Hong Kong has been through a period of repricing, and prices in the market softened, which has created a very unique opportunity for us to be able to buy an en-bloc residential asset in the Mid-Levels at pretty exciting pricing,” Doshi said.

Weave paid the equivalent of below HK$14,000 per square foot of built area for the 48-apartment property. Once completed, the project will join Weave Suites Central West as the company’s Hong Kong Island assets, with Weave having opened that property at 123 Queen’s Road West in Sai Ying Pun just last month.

With the opening of the western district property, Weave now has a portfolio of 540 rooms in Hong Kong, with that number set to jump to 588 when the Mid-Levels project opens. Warburg Pincus announced its partnership with Weave in 2018, saying shortly after the company’s first location opened that it would invest up to $413.5 million into the rental residential platform.

Window of Opportunity

While the pandemic slowed Hong Kong’s real estate market last year, Doshi expects his team to make progress on a number of new acquisitions in the near future. “The acquisitions that we are making now are deals that we have been working on for 12 months,” Doshi said.

After Hong Kong’s flow of property transactions revived late last year, Doshi, who headed pension fund manager APG’s private real estate business in Asia Pacific before launching Weave, sees his now 50-person team as ready to move forward.

“We have demonstrated to vendors that we can execute, and we see a very interesting six months coming up for acquisitions in Hong Kong,” he said. “Just looking at the pipeline right now, there are probably three or four deals where we are getting close to pulling the trigger.”

Targetting Hotels

While Weave’s earliest projects focused co-living accommodation for young professionals, the company has been broadening its product line over the past year.

“We now effectively have three product lines under the Weave Living umbrella across co-living, serviced apartments and traditional multi-family residential,” Doshi said.

Weave Suites is positioned to appeal to to corporate clients, while the upcoming Weave Residence in the Mid-Levels will be targetted to more traditional apartment tenants. Those new facilities are in addition to the company’s three existing Weave Studios locations.

With a broader range of property types in its portfolio, Weave is also seeing an opportunity to acquire traditional apartment blocks, serviced apartments as well as hotels.

“A lot of hotel owners globally are suffering, and we have the ability to reposition these assets into long-stay rental apartments,” Doshi said. “More importantly, however, is that we’re able to broaden our offering to the market, and this captures a much broader demographic and a broader customer base.”

Among the former hotels in Weave’s portfolio are its location in Kowloon’s Prince Edward area, which the company acquired in 2018, and in 2019 the company acquired the former Silka West Kowloon Hotel, which it has since reopened as Weave on Anchor.

In Hong Kong, Weave is focusing on a few key districts, and on locations within five minutes walk of MTR stations. The company also prioritises neighbourhoods near universities and other key infrastructure.

In addition to expanding its product line, Weave also expects to see progress this year on a joint venture it announced in Singapore last year. Beyond the Lion City, Doshi said that Weave will be looking into other markets in the region as travel opens up again.