LHN Ltd: Broad-Based Growth and Strategic Expansion in Co-Living and Space Optimisation

Key Highlights from Maybank’s Latest Report

• Strong Occupancy and Expansion: LHN’s co-living portfolio, branded as Coliwoo, has expanded to 3,200 rooms in Singapore, boasting a robust occupancy rate of 96.5% as of end-December 2025. Occupancy across industrial and commercial properties remains healthy at 86%-95%.
• Coliwoo Spin-Off and Forecast Revision: Following the listing of Coliwoo in November 2025, LHN now owns 65% of the subsidiary. This led Maybank to revise LHN’s FY26-27 earnings forecasts down by 24% and 17% respectively, mainly due to increased minority interests. Despite this, the analyst maintains a BUY call and raises the target price to SGD 0.70, up 27% from the previous SGD 0.55.
• Space Optimisation: The Crown Jewel The Space Optimisation segment remains the main revenue driver, contributing over 50% of FY25 revenue. LHN continues to add value through management contracts (including 267 new rooms for a transport operator) and new joint ventures.
• Facilities Management and Carpark Operations: The facilities management division secured 14 new contracts and renewed 100 in 1QFY26. Carpark operations expanded with two new locations (Ngee Ann Polytechnic and Ibis Bencoolen), adding over 1,200 lots, bringing total managed lots to 29,700.
• Aggressive Expansion Plans: Management targets growing Coliwoo to 4,000 rooms by end-2026 and enhancing its overseas SOHO residential portfolio. Work+Store footprint will grow via M&A, with plans to convert basic storage units to aircon storage, adding 10,000 sq ft in FY26.
• Property Development Diversification: LHN entered a joint venture for a 5% stake in Thomson Gem, leading to successful tender of the industrial property at 680 Upper Thomson Road, which will be redeveloped. This move is designed to diversify income streams and spread development risk.
• Financial Metrics & Valuation:
  • FY26E P/E: 9.3x, considered undemanding compared to global hospitality peers.
  • Dividend yield: Expected to be 5.0% in FY26, rising to 6.7% by FY28.
  • Net gearing: Improving from 91.5% in FY24 to 49.2% in FY28; stable due to asset-light strategy and JV expansion.
  • Formal dividend policy: Minimum payout ratio of 30%.
• ESG Initiatives:
  • Two properties BCA Green Mark certified.
  • Solar panels installed in several properties, covering 7% of energy consumption (2,468kWp).
  • Water-saving taps installed in all managed properties, with a target to reduce water consumption intensity by 5%.
  • IOT deployment for energy monitoring.
• Corporate Governance:
  • Board consists of five directors (three independent non-executive).
  • Executive Chairman and Group Managing Director are siblings, controlling a majority stake (~55%).
  • No reported corruption or data incidents in the past six years.
  • Gender diversity: 58:42 overall, 40% in senior management.
• Risks and Swing Factors:
  • Upside: Higher rental rates, strong occupancy, asset divestments, special dividends post-disposal.
  • Downside: Project delays, increased competition, failed lease renewals, higher interest rates.
• Historical Share Price and Performance:
  • 12-month price target raised to SGD 0.70 (+18%).
  • Strong share price performance relative to Straits Times Index, with absolute returns of 23% over the past year.
• Financial Summary:
  • Revenue: Expected to grow from SGD 121m (FY24) to SGD 163m (FY28).
  • Core net profit: Forecast to rise from SGD 29m (FY24) to SGD 35m (FY28).
  • Free cash flow yield: Robust at 22.5%-27.1% over FY26-FY28.

Shareholder Considerations & Price Sensitivity

• Coliwoo spin-off and lower ownership (65%) will impact future profit attribution, but also enables aggressive asset-light growth and potential value unlocking via further divestments.
• Dividend policy and payout ratios remain attractive, with the potential for special dividends if asset sales occur.
• Rapid expansion in co-living, storage, and facilities management could drive revenue and profit growth, but execution risks (project delays, lease renewals) remain.
• Asset-light strategy, JV approach, and capital recycling are positive for long-term financial stability and risk management.
• ESG enhancements (solar panels, water savings, Green Mark certifications) may appeal to sustainability-focused investors.
• Potential for price-sensitive news includes:
  • Further asset divestments or special dividends.
  • New or expanded joint ventures in property development.
  • Major M&A activity in Work+Store or facilities management segments.
  • Material changes in occupancy rates or rental yields.

Conclusion

LHN Ltd continues to demonstrate broad-based momentum with robust occupancy across co-living, industrial, and commercial properties. The listing and partial spin-off of Coliwoo, aggressive expansion plans, asset-light strategy, and increased focus on ESG initiatives position the group for sustained growth. Shareholders should monitor developments in asset divestments, JV partnerships, and expansion milestones, as these could significantly impact share value and dividend payouts. The revised forecasts and higher price target suggest confidence in the company’s long-term prospects, but execution risks remain.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should consult their financial advisor before making any investment decisions. The information is based on a research report by Maybank Research Pte Ltd and is believed to be accurate as of the date of publication but may be subject to change. We do not undertake to update any forward-looking statements or information. Past performance is not necessarily a guide to future performance.