THE CONTEXT

• There's been some buzz around LHN Ltd as its stock price marched upward following its April announcement that it would spin off its co-living business.  

• Investors and analysts see the spin-off of Coliwoo unlocking value, and the stock has pretty much doubled from 40 cents to 79 cents

 There’s talk of raising cash to capitalise on expansion opportunities, maybe even special dividends, and Coliwoo getting the chance to grow even faster as its own company.

Yes, there are opportunities but there are also risks -- which a 32-page initiation report by CGS International delves into. 

• With high residential rental rates in Singapore, budget-conscious foreign students and professionals are turning to co-living.

coliving sharedspaces7.252025 is LHN's 10th year of listing on the SGX. LHN's executive chairman and group MD, Kelvin Lim, is a controlling shareholder. His sister, Jess Lim, is LHN's group deputy MD. 

• Short-term visitors also find co-living attractive but Coliwoo has to constantly seek an influx of new customers.

Another vulnerability, not evident now, is a weak economic outlook and slower hiring of expats.

• Singapore's co-living market is still nascent and fragmented, limiting economies of scale and profitability.

• While the Singapore government has released a few state properties for co-living use, no Government Land Sales sites are specifically for co-living, and high real estate prices make rapid scaling through purchases financially challenging.
 

• 
Read the CGS report which has pegged a $1.00 target price for LHN, even higher than the 81-cent target of DBS Research ...



Excerpts from CGS report
Analysts: TAN Jie Hui & LI Jialin

 Value up in the making
■ LHN specialises in space optimisation and facilities management in SG. Key brands are Coliwoo (co-living) and Work+Store (self-storage). 

 

LHN

Share price: 80 c

Target: 
$1.00

We expect Coliwoo’s PBT to grow 20% in FY26F and 29% in FY27F as more projects are completed. A spin-off of Coliwoo would unlock more value.

■ The property development and industrial segments are likely to be the new growth engines for LHN post the Coliwoo spin-off.

■ Initiate coverage with an Add call and a TP of S$1.00, based on 10x CY26F P/E. Current valuations remain undemanding at 6.1x CY26F P/E.

 

 Fast-growing co-living business


LHN Ltd is a Singapore-based real estate management group that specialises in space optimisation, facilities management and other solutions across residential, industrial and commercial segments.

PaulChew"We expect Coliwoo to grow its keys at a FY24-27F CAGR of 27%. In FY25F, we estimate Coliwoo registering 1,004 new keys (+40% yoy), as LHN managed to secure 159 Jalan Loyang Besar (+350 keys) in Jun 2025 and is currently working on adding another 600 keys through two new projects this year.."
--  CGS International

Coliwoo, LHN’s main growth driver and key co-living business (1H25: 56% of PBT), started operations in 2019.

As of Mar 2025, Coliwoo had 2,595 keys; this is set to double to 5,145 in FY27F as LHN aims to acquire 800 new keys annually.

Value-unlocking for Coliwoo; revenue growth spurt expected in FY26-27F

The key near-term catalyst would be the value unlocking of 100%-owned Coliwoo through a potential spin-off and IPO, which LHN is preparing for.

We expect LHN to use the proceeds to increase capital returns to shareholders and embark on more opportunistic investments.

For FY26F, we expect Coliwoo’s revenue to grow by 20% yoy as Coliwoo Bugis and the recently awarded Coliwoo Resort Chalet would be completed (+562 keys, +25% yoy).

LHN aims to secure 600 more keys through two new projects in FY25F.

Along with the completion of 50 Armenian Street, we expect Coliwoo’s revenue to grow by 29% yoy in FY27F, assuming 720 new keys in total (+25% yoy).

Future of LHN: property development and industrial segments

During 1H25, LHN registered its maiden revenue contribution of S$12m from the sale of six strata-titled units at LHN Food Chain, a recently developed industrial property.

We expect the sale of the remaining 43 units to support topline growth for FY25-27F.

LHN also has the Geylang property redevelopment in its property development pipeline.

Additionally, LHN’s industrial assets are historically more profitable (c.60% PBT margin) than its other business segments.

Backed by an average rental step-up of 3-8%, we believe the industrial assets (c.28% of 1H25 PBT) will be a key growth focus for LHN post-Coliwoo spin-off.

 Initiate coverage, with an Add call and TP of S$1.00

We initiate coverage on LHN with an Add call and a TP of S$1.00, based on 10x CY26F P/E (10-year mean). 

Tan Jiehui 7.25"We value LHN using the P/E methodology because LHN is able to scale earnings without proportionate asset expansion, in our view. Segments such as Coliwoo and Work+Store also operate on high occupancy and margins, leading to strong earnings visibility. Our TP multiple is based on a 10-year historical average. Global peers are currently trading at 25x CY26F P/E."

-- CGS analysts Tan Jiehui (above) & Li Jialin.

LHN currently trades at 6.1x CY26F P/E.

Re-rating catalysts include a successful listing of Coliwoo, acquisition of more industrial assets, and potential special dividends.

Key downside risks include declines in occupancy and rental rates, and limited suitable assets for acquisition.



Full CGS report here 
See also: Coliwoo's Big Leap: Why LHN's Co-Living Brand is Getting Its Own Listing

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