Yahoo Finance The Assembly Place: 1,000 rooms today, targeting 3,000 by end of next year
Lim: We will be the first co-living operator in Singapore with such a wide spectrum of accommodation – residential, serviced apartments, hotel and hostel (Photo: Samuel Isaac Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - The Assembly Place at Mayo, located at the corner of Mayo Street and Jalan Besar, opened in early September as a “co-living hotel”. Before that, it had been known as Mayo Inn, a 23-room, no-frills boutique hotel in a four-storey, 999-year leasehold building dating back to 1935.
While the hotel was recently refurbished with a new reception area and other updates, it has retained part of its old-world charm, from its facade, stained glass windows and wrought-iron grills to vintage lift, retro wooden furniture in the rooms (although newly varnished) and bathrooms with white subway tiles.
According to Eugene Lim, founder and CEO of co-living operator The Assembly Place (TAP), the co-living hotel fills a gap in the market. “Our residential co-living spaces have a minimum stay of three months, under URA regulations,” he says. “Over the past year, we have received a lot of enquiries from those who want to stay for a shorter period, from just a few weeks to over a month.”
Before the co-living hotel opened in the first week of September, TAP had already pre-leased 12 of the 23 rooms to guests staying for at least a month. Today, the property has an occupancy of about 85%. The normal average room rate is set at $150 a night for a deluxe room and $280 a night for a family suite. For the F1 Singapore Grand Prix weekend, however, room rates have ratcheted up to $200 and $350 a night, respectively.
Demand has also come from TAP’s existing members in its co-living spaces whose family and friends want to visit them in Singapore now that borders have reopened for travel, says Lim.
The exterior of the four-storey building dating back to 1935 is now the flagship co-living hotel of The Assembly Place. It was the Mayo Inn before (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The hybrid ‘co-living hotel’
The opportunity to operate a co-living hotel came about when the owner of Mayo Inn, a couple who had been running the hotel on their own for the past 14 years, decided it was time to hand over the keys to a new operator. Having signed a five-year lease with the owner, Lim spent “a few hundred thousand” on refurbishing the property and giving it “a fresh look”.
The owner-operator of Mayo Inn is not the only one. Others have approached TAP with similar arrangements. “Boutique hotels have had a tough time over the past decade, especially single hotel owners and operators who do not have economies of scale,” says Lim. “Many were badly hit during the pandemic.”
TAP’s second co-living hotel will occupy a row of four adjoining conserved shophouses at Veerasamy Road in Little India. The 24-room hotel was formerly known as RedDoorz Hotel Premium @ Serangoon. It was the maiden hotel managed by homegrown hotel operator and booking management company RedDoorz.
The shophouses are being refurbished and will reopen in November as the co-living hotel. The pricing of the rooms will be similar to that of the co-living hotel at Mayo Street, notes Lim. However, the property at Veerasamy Road will be positioned as a “boutique sustainable hotel”, where the hotel’s cleaning solutions as well as guest amenities from shampoo to body wash and toilet rolls, will be 100% sustainable, says Lim. “This is important and in line with what we want to achieve progressively as an organisation,” he adds.
One of the 31 rooms with a total of 180 beds at the upcoming The Assembly Place co-living hostel at 25A Perak Road (Photo: Samuel Isaac Chua/EdgeProp Singapore)
‘Co-living hostel’
Also opening in November is TAP’s first co-living hostel at 25A Perak Road, which obtained Temporary Occupation Permit (TOP) a fortnight ago. The 31-room, 180-bed TAP co-living hostel is positioned as “a premium hostel”.
Since the pandemic, hygiene and cleanliness has become a priority for room guests, especially women, notes Lim. “Most hostels in Singapore have common bathrooms, but we make sure that each room has an en suite bathroom,” he says. “We want to assure our guests that we emphasise cleanliness; that’s why we are providing an en suite bathroom for each room.”
The property at 25A Perak Road is an island block located at the corner of Perak Road and Dickson Road. It was formerly a backpackers’ hostel named Footprints Hostel.
TAP has also signed a five-year lease with the property owner of 25A Perak Road to manage the property. Lim believes there is a market for premium hostels that cater to large families, friends travelling together, and even companies that have teams visiting Singapore for work on assignments ranging from a few weeks to over a month.
“Instead of paying $300 to $400 a night for a hotel room, at TAP’s co-living hostel, up to six people can share a room for $220 to $250 a night,” he says. A month ahead of its opening on Nov 1, about 140 out of the 180 beds have already been pre-leased, according to Lim. For those staying at least one month, the rate will be $2,500 a month.
Besides an en suite bathroom, each room will come with a washer-dryer. Shared amenities include a kitchenette on every floor, which caters to those who wish to prepare or cook simple meals. On the first level, the reception area has a lounge, a communal kitchen and dining area. For the convenience of hostel guests, the rooms on the ground floor have direct access from the street.
Under URA’s regulations, windows of hotel rooms cannot be opened. “It is difficult for someone to stay in a hotel room for more than a few days if the windows can’t be opened,” says Lim. TAP has carved out pockets of communal spaces within the property, such as lounges and seating areas, both indoors and outdoors, to counter cabin fever.
The exterior of the conservation shophouses at 138 to 142 Jalan Besar, which is now the 16-room The Assembly Place co-living space which opened in April this year (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Scaling up
With two hotels and one hostel in its portfolio and all located within the Little India district, Lim believes this warrants the hiring of a professional hotel general manager to oversee all three properties. “Scale is important in our business,” he reasons. “We like the idea of having a collection of spaces in one location. Our operations will be more efficient, thereby reducing the operating cost for each asset.”
With several properties within one area, TAP’s members will also enjoy the benefit of choice, he adds. Today, TAP has about 1,200 members. In 2019, expatriates accounted for up to 90% of the co-living residents at TAP, with Singaporeans making up the remaining 10%. During the pandemic in 2020–2021, the proportion of Singaporeans increased to 30%, made up of young Singaporeans wanting to move out of their family home.
Since Singapore’s travel borders reopened, the barometer has shifted again, with expatriates now accounting for 80%, and Singaporeans 20%. “We receive about 50 enquiries daily from expatriates who are relocating to Singapore for work,” says Lim.
One of the recent co-living properties that TAP is managing is across three adjoining shophouses at 138 to 142 Jalan Besar with 16 rooms. TAP restored the conservation shophouses, including the traditional wooden shutters for the windows. The rooms on the uppermost floor of the shophouses enjoy a high sloped ceiling due to the pitched roof.
One of the rooms at 138-142 Jalan Besar, where all the rooms have been taken up within a fortnight of opening, with rates from $2,500 to $3,200 per month (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Benefitting from an upswing in residential rental market
The property at 138 to 142 Jalan Besar opened in April and was fully leased within two weeks. Rooms in this space have a monthly rental rate ranging from $2,500 for a standard room to $3,200 for the bigger rooms.
Located beyond the reception of the shophouse at 142 Jalan Besar is a hotel that plays host to residents of another species: “Moon Bunny”, a hotel for pet rabbits when their owners are on holiday. It also provides workshops and grooming services for rabbits. Moon Bunny is a tenant of TAP.
Before TAP’s conversion into a co-living space, the owner had operated his hardware business from the premises of the conservation shophouses.
Besides Jalan Besar, TAP also manages a cluster of rooms at shophouses and houses along Owen Road in the Farrer Park area nearby. A year ago, rooms in one of the shophouses at Owen Road were leased at an average of $1,900 a month. Today, those same rooms command $2,600 per month.
TAP opened the 12-room co-living space at 257 Outram in May, and it was fully leased within a week, with rates hitting a high of $2,700 to $2,800 per month. And it’s not just due to its location in the city fringe, close to the CBD and Chinatown.
Co-living operators like TAP are beneficiaries of the upswing in residential rental rates. “There’s a lack of supply,” says Lim. “It’s good that the rental market has recovered; it had been stagnant for the past 10 years.”
When TAP’s co-living property at 60 Wilkie Road, in the neighbourhood of Mount Sophia, opened in June, all 12 rooms were leased within a week at $2,600 per month. The strong demand was also due to all rooms in the property being en suite, adds Lim.
Artist's impression of the interior of the upcoming 42-room The Assembly Place at Duke Road, which is targeted to open next February (Photo: The Assembly Place)
A pipeline of purpose-built co-living properties
An upcoming co-living space, with 42 rooms, will also be one of TAP’s largest. TAP has recently signed a deal to undertake the conversion, renovation and interior design of the eight walk-up apartments on the upper floors of three adjoining blocks located at 551 to 553 Bukit Timah and 6 to 8 Duke Road.
There are four shops on the ground floor of the three blocks, but TAP will not be managing those. The owner had purchased the three properties at Bukit Timah Road and Duke Road in an en bloc deal for $53.9 million in December 2021. (See potential condos with en bloc calculator)
TAP is targeting to complete the renovation and fitting out of the property at Duke Road by next February. The addition of the property at Duke Road will bring the number of purpose-built co-living assets managed by TAP to 23.
To cope with the increased pipeline, TAP now has a team of 25 on board, including an in-house project manager, an architect, an interior designer, three handymen for maintenance and repairs of the properties under management, as well as housekeeping staff.
Two other purpose-built co-living properties are due to open in the coming month. One is at 3 Tank Road, off River Valley Road, with 15 rooms targeted to open by the end of this year. The other is a building conversion at 18 Penhas Road, off Lavender Street, with 12 rooms targeted to open sometime in 1Q2023. Both properties are co-living spaces with serviced apartment status, notes Lim, which means they can be rented out for a minimum of seven days.
This means that TAP’s co-living portfolio now extends from residential to serviced apartments, hotels and hostels. “We will be the first co-living operator in Singapore with such a wide spectrum of accommodation,” says Lim.
Artist's impression of one of the rooms at the upcoming purpose-built co-living space at Bangsar, Kuala Lumpur, which is currently under construction and expected to open in the middle of next year (Picture: The Assembly Place)
Overseas expansion
The addition of the new hotel-based offerings brings the number of rooms managed by TAP to over 1,000 across 90 properties, including those strata-titled units operated under a straight lease.
TAP’s portfolio was enhanced by its acquisition of co-living operator Commontown’s Singapore portfolio in March this year. The co-living operator from Seoul had 20 rooms across the prime neighbourhoods of Newton, Novena and River Valley Road prior to the acquisition of the operator by TAP.
“We have always maintained that we wanted to hit 1,000 rooms by this year,” says Lim. “By the end of 2022, we are optimistic that we will have 1,200 to 1,250 rooms.”
Beyond Singapore, Lim has set Malaysia, specifically Kuala Lumpur, as his target market for overseas expansion. TAP will be opening its first purpose-built, co-living hotel with 66 studio apartments in Bangsar, an area that is popular with expatriates given the cluster of malls, entertainment spots and cafes.
“The co-living market in Kuala Lumpur is large but fragmented,” says Lim. “There is no purpose-built co-living space at the moment, so we will be the first.” It’s not just a co-living space. As the property has a hotel licence, it will be a co-living hotel.
“There is no hotel in the vicinity, and having a hotel licence gives us the flexibility to run it both as a co-living space and a hotel with a daily room rate,” he says.
Construction of the property in Bangsar is still underway and scheduled for completion in 2Q2023. However, Lim is not stopping at one. He is currently in talks to open two more purpose-built, co-living properties in Petaling Jaya, which will bring his portfolio of rooms in the Petaling Jaya-Kuala Lumpur market to 250 to 300 rooms by the middle of next year. “We need to achieve scale and critical mass, so we will build on our pipeline,” he says.
Singapore remains TAP’s base, says Lim. He is confident that there’s still capacity for growth, and his game plan is “to hit 3,000 rooms by the end of next year”, he adds.
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