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Coliwoo Holdings IPO Paves the Way for Major Re-Rating in Singapore’s Co-Living Sector

Overview: Coliwoo Holdings’ Listing Set to Transform LHN’s Growth Trajectory

LHN has announced a strategic move to list its subsidiary Coliwoo Holdings on the Mainboard of the Singapore Exchange, a step that signals a major re-rating for the group and the co-living hospitality sector in Singapore. Post-listing, LHN will retain no more than 70% ownership of Coliwoo, allowing for a substantial injection of fresh capital and enhanced market visibility.

Key Details of the Coliwoo Holdings IPO

The shareholder circular outlines a projected market capitalisation for Coliwoo Holdings ranging between S$257 million and S$359 million. The IPO will raise between S$77 million and S$108 million through the issuance of new shares. This capital will enable LHN to de-gear its balance sheet and pursue new space optimisation opportunities, including expansion into storage facilities.

Operational Performance: Healthy Occupancy and Strong Pipeline

Coliwoo continues to demonstrate robust operational metrics with occupancy rates holding steady at approximately 97%. This high occupancy is not limited to Coliwoo’s co-living spaces but also extends to industrial property assets. The company’s growth pipeline remains strong, with 776 new rooms currently under construction, representing a 35% expansion in capacity. Notably, these figures do not include additional contracts for healthcare worker accommodations, which could further augment future growth.

• Occupancy Rate (Coliwoo & Industrial): ~97%
• Rooms Under Construction: 776 (35% growth)
• Additional Growth: Excludes new healthcare worker accommodation contracts

Valuation Upside: Significant Re-Rating Opportunity

Assuming a FY24 adjusted net profit of S$13 million for Coliwoo, the implied price-to-earnings (PE) valuation for the IPO ranges between 20x and 27x, which is a substantial premium compared to LHN’s current valuation. This re-rating reflects Coliwoo’s leadership position and rapid expansion in the co-living hospitality market. While hospitality and property management peers are trading at approximately 25x PE, LHN’s smaller operational scale warrants a discount, but the gap is narrowing.

Strategic Use of Proceeds: De-Gearing and Expansion

The capital raised from the Coliwoo IPO will be strategically deployed to reduce LHN’s gearing, strengthening its balance sheet and enabling the group to pursue new growth opportunities in space optimisation. Storage facilities have been identified as a promising area for expansion, leveraging LHN’s expertise in property management and optimisation.

Shareholder Returns: No Special Dividends Expected

Despite the unrealised disposal gains from the Coliwoo IPO, LHN does not anticipate distributing special dividends to shareholders. Instead, the focus remains firmly on reinvesting proceeds to drive operational and strategic growth.

• No expectation of special dividends post-IPO
• Priority on reinvestment and operational expansion

Target Price and Earnings Outlook

Reflecting the uplift in valuation and growth prospects, the target price for LHN has been raised from S$0.61 to S$1.13, based on a revised PE multiple of 13x for FY25e, up from 7x previously. The earnings outlook for FY25 remains unchanged, underscoring confidence in the group’s ability to deliver sustainable growth as it transitions into a new phase post-IPO.

Conclusion: Coliwoo IPO Marks a Turning Point for LHN and Singapore’s Co-Living Market

The imminent listing of Coliwoo Holdings represents a transformative moment for both LHN and the broader co-living sector in Singapore. With healthy occupancy rates, an expanding growth pipeline, and a strategic approach to capital deployment, LHN is well-positioned for sustained value creation. Investors will be keenly watching how the group leverages its strengthened balance sheet and market leadership to unlock further growth in property management and hospitality.