Weave Living has secured further investment from existing shareholders, founder and CEO Sachin Doshi and private equity major Warburg Pincus, as the rental residential operator looks to double its portfolio in an expansion set to take it beyond Hong Kong, Singapore and Tokyo, the company announced Monday.
The equity injection will support Weave’s expansion of its brand footprint and portfolio to over 5,000 owned and managed units in rental housing markets including Tokyo, Osaka, Seoul, Singapore, Hong Kong and other select gateway cities by 2025, the firm said in a release.
While enabling the company to double its current portfolio of 2,500 units, the new investment will also help Hong Kong-based Weave grow its institutional asset management business in the rental housing sector, primarily in the key markets of Japan, South Korea and Singapore.
The news comes just a few weeks after Weave formally launched fundraising for its inaugural multi-family fund dedicated to the Japan market. Weave Living Japan Residential Venture I is planned as the first in a series of vehicles targeting the rental housing sector in Asia’s second-largest economy, with an initial target of raising $500 million in equity from global institutional investors.
“We are delighted to embark on this next growth phase for Weave with strong support from Warburg Pincus, who has been a trusted and strategic partner to us since 2018,” Doshi said. “We continue to grow our offering across the region with 25 existing locations throughout Asia Pacific’s key rental housing markets, and with strong institutional investor support, are on track to grow our AUM to over $3.5 billion over the coming few quarters.”
Tokyo Seed Assets
Japan Residential Venture I will be seeded with a portfolio of 11 recently completed assets in prime Tokyo locations which the company has acquired over the past four months. Mingtiandi reported last September on Weave’s entry into Japan with the purchase of nine multi-family assets with 352 units in the capital.
Backing for the new vehicle could be via fund investment, a club structure or from a single investor, Doshi told Mingtiandi, with Weave retaining up to 10 percent of the strategy.
As it scales up, Weave is sticking with its strategy of owning a stake in and managing the properties in its portfolio, with Doshi referring to the company as an asset-led business with sector-leading, in-house management capabilities.
“We will continue to grow our institutional asset management business where we raise third party capital from institutional investors for investment programs or at the asset level (like we have done with many already) and provide the full range of investment management, design and development management, operations and marketing for these vehicles and JVs,” Doshi said. “As we do this, Weave will always have an ownership stake in these assets and the underlying vehicles.”
Weave now has a team of 15 on the ground in Japan covering all aspects of its business, including investment, asset management, design and technology, with Doshi spending significant time in the country. In Japan the company works actively with developers, typically acquiring assets via forward purchase arrangements and then leveraging its asset management capabilities to launch the projects.
Partners in Progress
As institutional investors globally hunt for rental residential opportunities, Weave has positioned itself as Asia Pacific’s only region-wide specialist in the living sector. Since its launch in 2017, the company has accelerated its expansion by partnering with some of the world’s largest real estate fund managers on ventures across the three markets where it currently operates.
Weave earlier this month unveiled a joint venture with a BlackRock fund to buy a Singapore serviced apartment block for S$148 million ($111 million). The JV with the world’s biggest asset manager agreed to acquire Citadines Mount Sophia, a 154-unit property near the city-state’s Bugis area, from CapitaLand Ascott Trust for the equivalent of just over S$961,000 per key as the operator’s second Singapore location.
The Hong Kong-based firm opened its inaugural Singapore location in Kampong Glam in March of last year and rapidly leased out the 65-unit set of former shophouses at rents exceeding original estimates.
The BlackRock joint venture followed earlier tie-ups by Weave with top global fund managers. The firm’s partnerships include an August 2022 acquisition of an apartment tower on Robinson Road in Hong Kong in a JV with LaSalle Investment Management for $35 million.
That deal in Central came just three months after Weave worked with Angelo Gordon to purchase a hotel in Hong Kong Island’s Western district for $115 million. In April 2022, Weave had linked up with PGIM Real Estate to acquire the Rosedale Hotel in Kowloon for $175 million.
Watch This Space
Without providing details, Doshi hinted that Weave is in the advanced stages of announcing a significant venture in a new market. In addition to Weave’s announced projects in Hong Kong, Singapore and Japan, the firm’s website holds a heading for South Korean projects with the promise that listings are “coming soon”.
Qiqi Zhang, managing director at Warburg Pincus, pointed to Weave’s “strong track record” of delivering innovative and customer-centric projects and voiced confidence in the firm being well-placed to become the regional market leader in the fast-growing living sector.
“We have been very impressed by the achievements and growth of Weave, our flagship rental housing platform in the Asia Pacific region, and are delighted to increase our investment in the company and grow our partnership with Sachin and his exceptional management team,” Zhang said.
Warburg Pincus announced its first investment in Weave in 2018, committing up to $413 million to the company.
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