“We expect the upcoming 141 Middle Road (141MR, 212 keys, 2Q2026) and 159 Jalan Loyang Besar (159JLB, 382 keys, 3Q2026) to see strong take-up; Coliwoo is currently in talks with Singapore Management University for occupancy at 141MR while management projects strong aircrew demand at 159JLB,” add Tan and Lim, who also note that FY2026 will see a full-year contribution from Kampong Glam and Fire Station Bukit Timah.
The analysts are projecting Coliwoo to contribute about 40% of LHN’s FY2026 net profit, though below FY2025’s 70%. They kept their “add” call on LHN but dropped their target price to 88 cents from $1.20 previously to reflect higher minority interest following Coliwoo’s listing and to strip out income from subleased assets where gains were front-loaded in FY2025.
Coliwoo will focus on master leases and management contracts, said LHN, targeting 800 new keys over the next three years and aiming to reach 4,000 rooms by end-2026. Its pipeline is robust, with active bids or negotiations for about 300 rooms at Phoenix Park, a 320-room Cleantech Park hotel pending approval from the Urban Redevelopment Authority (URA) and the potential acquisition of a 360-room joint ventre (JV) hotel in eastern Singapore.
Coliwoo is also pursuing two JV hospitality projects (100 and 300 rooms) and a contract for 800 healthcare accommodation beds, giving management confidence it can hit its FY2026 growth targets.
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Beyond Coliwoo, the two analysts are positive on LHN’s Work+Store segment, as the group is in advanced talks to acquire a Work+Store building in Ang Mo Kio. It also plans to convert more existing facilities into aircon storage units, which could lift rents by around 20% when executed.
Overall, the analysts say: “We expect Coliwoo to add 800 keys and LHN to acquire 300 self-storage units in FY2026.”
Similarly, PhillipCapital has kept its “buy” call and lowered target price to 85 cents from $1.13 previously.
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Analyst Paul Chew says: “Post Coliwoo listing and a stronger balance sheet, we expect LHN to pay a higher dividend yield and to deploy capital into new areas of growth, namely storage space and facilities management businesses. Valuations remain attractive at a dividend yield of almost 6% and an adjusted PB of 0.9x.”
Chew refers to the group’s 2HFY2025 ended Sept 30, which saw revenue increase by 13% y-o-y to $22 million (excluding one-off facilities services), thanks to a 15% rise in rooms supported growth. Profit before tax for Coliwoo spiked 67% y-o-y to $9.8 million due to the prior year’s upfront cost in healthcare accommodation and new properties.
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However, he is cautious of slower sales of food factory units. Property development revenue of $2 million in 2HFY2025 was a sharp deterioration from the $12 million in 1HFY2025. In FY2025, seven of the 49 unit 55 Tuas South Avenue 1 food factories have been sold. “Sales have been weaker than expected. There remains an opportunity for bulk purchases,” says Chew.
Overall, Chew expects stronger earnings growth for LHN in FY2026, driven by Coliwoo’s room expansion, new storage facilities, lower interest expense, and higher facilities management earnings from growth in the car park and absence of Hong Kong losses. But he notes that underlying earnings on a y-oy- basis will be impacted by lumpy sublease gains.
UOB Kay Hian too has kept its "buy" call, while dropping its target price down to 84 cents from $1.12. Analysts Heidi Mo and Tang Kai Jie see several growth pathways for the group, as it is driving growth across its industrial and
commercial space optimisation, co-living and facilities management businesses.
In its space optimisation segment, the group is growing its portfolio and attracting more tenants by acquiring additional Work+Store properties and upgrading its current facilities with new air-conditioned storage units. LHN added two new master leases at 6A/6B Jalan Papan and 10 Raeburn Park.
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Its co-living business continues to scale with the launch of Coliwoo Bukit Timah Fire Station, putting LHN on track to reach 4,000 rooms by end-FY2026.
In facilities management, the group is enhancing technology and automation, broadening services into new sectors, and adding clients and car park assets, securing 14 new contracts and five new car parks in 4QFY2025, bringing its industrial & commercial facilities management portfolio to 121 clients and total car park capacity to over 27,700 lots.
"At around 10x adjusted FY2026 PE, LHN trades at a steep 40% discount to peers’ average of 18x. LHN’s sustained core earnings growth amidst a valuation discount should underpin share price performance and re-rating potential," say Mo and Tang. They have also lowered FY2026/FY2027 revenue forecasts by 5% due to lower-than-expected LHN’s residential segment revenue. despite uplifts from other business segments. Subsequently, FY2026/FY2027 earnings forecasts are lowered by 15% due to lower contribution from the higher margin residential segment business. Core Patmi is still expected to grow, supported by strong underlying business fundamentals.
As at 11.40am, shares in LHN are trading 33% higher ytd at 66 cents; shares in Coliwoo are trading at 56 cents, down about 5% from when it first listed last month.
