Warburg Pincus invests $181m in Hong Kong’s Weave Co-Living

Global private equity firm Warburg Pincus has invested $181 million into Hong Kong-based Weave Co-Living, with an option to upsize the investment to up to $413.5 million in the future.

Weave is Hong Kong’s first institutional co-living rental accommodation provider, and also the first of its kind that Warburg Pincus has backed outside of mainland China, following platforms such as Mofang, Nova and Ziroom.

Founded in 2017 by Sachin Doshi, former head of private real estate at APG Asset Management, Weave targets millennials and young professionals through providing conveniently located, affordable living spaces. The company’s first property, Weave on Boundary, opened in August this year and covers a community of 160 residents. It is almost at full occupancy. Weave received close to 1,000 rental applications, six times more than the total number of bedrooms at the property, it said in a statement.

With the financing from Warburg Pincus, the company plan to grow its portfolio in gateway cities across Asia Pacific to over 10,000 bedrooms in the next five years. It will also launch new rental accommodation options catering to different target demographics.

“There is a fundamental shift in the way young people want to live, interact and experience a more fulfilling lifestyle. With serious affordability constraints and limited supply of quality rental apartments across many gateway cities in the region, collaborative living is an innovative, hassle-free way of urban living,” said Doshi.

Weave cited research data that Hong Kong, Sydney, Melbourne, Tokyo and Singapore were among the least affordable global cities for residential real estate, and home ownership by millennials in Asia Pacific was 11 per cent, significantly lower than the global average of 15 per cent.

In addition to shared spaces like movie room, kitchen, gym, games area and laundry, Weave aims to leverage technology to launch Wally, a resident portal that enables the social life of its residential community.

With an impressive 95 per cent occupancy within three months of launch, Warburg Pincus believes Weave is well positioned to become a leading regional co-living rental accommodation provider.

“This partnership builds upon our established investments in the multi-family sector in mainland China and we continue to be attracted to the significant market potential of the sector across key gateway cities in Asia Pacific underpinned by strong demand for good quality rental accommodation options,” commented Joseph Gagnon, managing director and head of Asia real estate for Warburg Pincus.

The $47 billion AUM private equity firm entered Asia in 1994, and has since invested over $17 billion in more than 170 companies in China, India and Southeast Asia.

The fund manager is actively investing in the real estate sector in the region, securing a portfolio worth over $4 billion, including companies such as Red Star Macalline, 7 Days Inn, D&J China, Embassy Parks, ESR, Guangzhou R&F, Mofang Apartments, Piramal Realty, and Vincom Retail.