Company Coverage
LHN (LHN SP): Resilient Core Operations; Growth Pipeline Intact
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$0.535
S$0.591
+10.5%
S$0.71
Analyst
Highlights
- LHN’s 3QFY26 operating performance remained resilient, with industrial and Work+Store occupancy improving, while softer Coliwoo occupancy reflected the ramp-up of Midtown.
- Coliwoo’s expansion pipeline remains intact, while facilities management and Work+Store continue to support recurring income growth.
- Maintain BUY with a 17% lower target price of S$0.591, pegged to 8.6x FY27F PE.
Analysis
- Resilient 3QFY26 industrial occupancies, with softer co-living and commercial performance. Industrial and Work+Store occupancies improved to 97.7% and 92.9% respectively, up 1.2ppt and 0.1ppt from their reported 1HFY26 levels. Coliwoo’s average occupancy declined to 93.7% (1HFY26: 97.0%), reflecting the inclusion of Coliwoo Midtown during its ramp-up phase. Excluding Midtown, portfolio occupancy remained healthy at 96.0%. Commercial occupancy fell 6.0ppt to 78.5% following the expiry and non-renewal of an anchor tenant’s lease. A replacement tenant has since been secured, with its lease commencing in 4QFY26.
- Coliwoo expansion remains on track, with pipeline supporting growth. Coliwoo’s portfolio remained at 3,568 rooms as at end-3QFY26, or 3,897 rooms including 85 SOHO. Coliwoo Midtown continued to ramp up following its Mar 26 opening, reaching close to 90% average occupancy by Jul 26. Looking ahead, Coliwoo Resort Changi commenced operations in Jul 26 with 380 rooms, while Coliwoo Hotel Changi Expo is being expanded to 368 rooms ahead of its targeted opening in 1QFY27. Longer-term projects include 153 rooms at 1 King George’s Avenue and 120 rooms at 50 Armenian Street. LHN remains on track for around 4,000 rooms in Singapore by end-26 and is targeting 10,000 rooms by 2030.
- Work+Store continues to optimise yields through higher-value storage units. Work+Store’s portfolio expanded to 2,186 units in 3QFY26, up 6.5% from 2,053 units in 1HFY26, while occupancy remained stable at 92.9%. LHN reconfigured basic storage units at 202 Kallang Bahru, adding more than 100 air-conditioned units as part of its FY26 target to complete around 10,000 sf of air-conditioned storage space. The conversion towards higher-value storage formats should support rental yields and margins over time.
Highlights
- LHN’s 3QFY26 operating performance remained resilient, with industrial and Work+Store occupancy improving, while softer Coliwoo occupancy reflected the ramp-up of Midtown.
- Coliwoo’s expansion pipeline remains intact, while facilities management and Work+Store continue to support recurring income growth.
- Maintain BUY with a 17% lower target price of S$0.591, pegged to 8.6x FY27F PE.
Analysis
- Resilient 3QFY26 industrial occupancies, with softer co-living and commercial performance. Industrial and Work+Store occupancies improved to 97.7% and 92.9% respectively, up 1.2ppt and 0.1ppt from their reported 1HFY26 levels. Coliwoo’s average occupancy declined to 93.7% (1HFY26: 97.0%), reflecting the inclusion of Coliwoo Midtown during its ramp-up phase. Excluding Midtown, portfolio occupancy remained healthy at 96.0%. Commercial occupancy fell 6.0ppt to 78.5% following the expiry and non-renewal of an anchor tenant’s lease. A replacement tenant has since been secured, with its lease commencing in 4QFY26.
- Coliwoo expansion remains on track, with pipeline supporting growth. Coliwoo’s portfolio remained at 3,568 rooms as at end-3QFY26, or 3,897 rooms including 85 SOHO. Coliwoo Midtown continued to ramp up following its Mar 26 opening, reaching close to 90% average occupancy by Jul 26. Looking ahead, Coliwoo Resort Changi commenced operations in Jul 26 with 380 rooms, while Coliwoo Hotel Changi Expo is being expanded to 368 rooms ahead of its targeted opening in 1QFY27. Longer-term projects include 153 rooms at 1 King George’s Avenue and 120 rooms at 50 Armenian Street. LHN remains on track for around 4,000 rooms in Singapore by end-26 and is targeting 10,000 rooms by 2030.
- Work+Store continues to optimise yields through higher-value storage units. Work+Store’s portfolio expanded to 2,186 units in 3QFY26, up 6.5% from 2,053 units in 1HFY26, while occupancy remained stable at 92.9%. LHN reconfigured basic storage units at 202 Kallang Bahru, adding more than 100 air-conditioned units as part of its FY26 target to complete around 10,000 sf of air-conditioned storage space. The conversion towards higher-value storage formats should support rental yields and margins over time.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$0.535
S$0.591
+10.5%
S$0.71
Analyst
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