“We have never missed 90% occupancy rates anywhere for the past eight years,” says Aaron Lee, founder of Hong Kong-based symbiont Dash Living.
Lee says that even during the pandemic, his 8-year-old company has managed to maintain rates between 90% and 95% for more than 2,000 rooms in eleven properties it operates in four markets (Hong Kong, Singapore, Japan and Australia).
By comparison, 5-star hotel room occupancy in Hong Kong rose to 56% from a year ago, up 15% through August of the year, according to industry consulting firm Knight Frank.
Dash Living’s tenants are often offered their own bedrooms and then share kitchens, laundries, and shared lounges. The company says it can offer flexible rental contracts that can be as short as a month, and its rates can be adjusted to reflect current market conditions.
The cohabitation trend has emerged as a solution that appeals to the budget-conscious millennials, especially in metropolitan areas like Hong Kong and Singapore, where housing costs are higher on average. The two cities have witnessed the conversion of hotels into communal living spaces, mixing private rooms with shared communal spaces.
“One reason for this is the sharp increase in residential rents across the region over the past few years,” says Noel Neo, Head of Middle Markets, JLL Hotels & Hospitality Group Singapore. “In the case of Hong Kong, another factor is the loss of revenue from underperforming hotels, which were hit hard first by social unrest and then by the pandemic.”
According to the latest data from JLL Capital Tracker, buyers in Hong Kong were able to purchase hotels at 20% to 40% off the pre-Covid price. “Hotel owners, stunned by the impact of the pandemic, were also more receptive to selling properties they previously held close,” says Neo.
The enthusiasm to invest in co-living in Singapore continued unabated. “Hotel prices have remained largely unchanged since the pandemic. Despite the recovery of tourism, a decline in demand for coexisting conversions on the basis of acquisition and conversion is highly unlikely,” says Neo.
Lee’s Dash Living competes for the district’s leadership role with Weave Living, which was founded in 2017 by former banker Sachin Doshi. Both have expanded aggressively in the region through acquisitions.
Dash Living has raised $18.8 million since its founding. Lee remains the company’s largest shareholder. Hong Kong-based Mindworks Venture, the largest non-founding shareholder, arrived in October 2019.
Starting with an old twelve-room building in Tsim Sha Tsui in downtown Kowloon, Hong Kong, he marketed them on Facebook. He found his first clients in the USA. These were three college students in Hong Kong looking for online accommodation to work as interns at Li & Fung, which would later cover their expenses.
Lee’s secret sauce is the combination of technology and targeted marketing via websites and social media to pre-sell available spaces.
“Our technology is very mature. Prices are adjusted according to the market to ensure that rooms are reserved. Prices are based on room availability. We find the right customer at the right price.”
Its successful recipe also includes trendy services: community-focused online and offline events, including wine tasting, and a wealth of free amenities, the most popular of which are gym memberships with outside operators. “It’s a necessity to live, it’s very sticky and we stay put for a long time,” he adds.
More than six months is considered long-term in hospitality; Dash Living’s typical leases with tenants, averaging ten months, are proof that cohabitation is far from impulsive.