Coliwoo operator LHN expects to post record profit for FY2024 as co-living demand jumps

SINGAPORE - Some providers of co-living spaces in Singapore are raking it in as demand picks up among individuals looking for alternative housing options.

Mainboard-listed LHN Group, which runs Coliwoo Co-Living, expects to post record earnings for its financial year ending Sept 30, 2024, thanks to increased profit from its core co-living business.

Co-living is a modern housing concept where individuals share living spaces and common amenities such as kitchens, lounges and other facilities with others, often as part of a community.

It provides an alternative residential option for younger professionals seeking affordable and flexible living arrangements as well as a more communal and connected lifestyle.

LHN is the largest listed co-living player in Singapore, with over 2,500 rooms spread across the Republic.

In an announcement via the Singapore Exchange after the market closed on Nov 16, LHN said it expects a net profit before tax for FY2024 of no less than approximately $50 million from continuing operations, including the co-living business.

This would be about 13 per cent higher than the $44.3 million it chalked up during FY2023.

Last year’s earnings had also included net profit before tax of $21.3 million from discontinued operations, primarily gains from the disposal of associate Getgo Technologies and subsidiary LHN Logistics.

The company said the higher profits for FY2024 arose mainly from increase in profit from the co-living business under its residential properties.

In its announcement, LHN added that its FY2024 earnings were also boosted by net fair value gains on its own and joint venture investment properties, compared with net fair value loss in FY2023.

Analysts note that in recent months, the company has also been undertaking capital recycling initiatives and has adopted a more disciplined approach to optimising its asset portfolio.

In June, it realised net proceeds of some $4 million from the sale of its 40 per cent stake in the carpark at Bukit Timah Shopping Centre, which was sold for $22 million. This will be reflected in the FY2024 results.

It was also a 50 per cent stakeholder in a venture that purchased Wilmer Place for $26.5 million. The four-storey non-conservation building in Singapore’s civic and cultural district with a remaining tenure of 22 years and total land area of 710.7 sq m will be converted and operated as a co-living space under LHN’s Coliwoo franchise.

Analysts remain sanguine on the outlook for the company.

Lim & Tan Securities maintained its 47 cents price target on the stock, citing the strength of demand for co-living apartments in Singapore, execution success and capital recycling.

The stock closed at 38 cents on Nov 18, up 5.5 per cent.