Coliwoo sells two River Valley properties for $45.5 mil in three-year leaseback deal
The sale-and-leaseback signals investor interest in established living-sector assets and may help Coliwoo reduce debt while funding higher-yielding projects without disrupting operations.
Coliwoo agreed to sell two freehold River Valley properties to Qing Feng Construction for $45.5 million and lease them back for three years.
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Singapore-listed co-living operator Coliwoo Holdings has agreed to sell two freehold properties in River Valley to Qing Feng Construction for a total of $45.5 million, while continuing to operate them under a three-year leaseback arrangement, the company said in an Oct 1 SGX announcement.
The properties are located at 298 and 288 River Valley Road, respectively. Qing Feng will acquire the companies holding the two properties for $14 million and $31.5 million, respectively.
Qing Feng Construction is a Singapore construction company whose projects span the residential, commercial and industrial sectors. The company has operated in Singapore for more than two decades and undertakes general building, design-and-build and civil engineering works.
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Upon completion of the transaction, a Coliwoo subsidiary will lease both properties from the new owner for three years, allowing the group to continue operating them under the Coliwoo brand without disruption.
The transaction follows Coliwoo's move in March to put seven freehold hospitality and living properties on the market for a combined $218.5 million as part of its capital recycling strategy.
The portfolio included three properties at 268, 288 and 298 River Valley Road, which together comprise 73 keys and were marketed at a combined guide price of $78.5 million.
Coliwoo said the latest disposal will similarly allow it to unlock value from the two properties, recycle capital into higher-yielding growth opportunities and strengthen its balance sheet through debt reduction.
After repaying borrowings secured on the properties, transaction-related expenses, and other completion adjustments, Coliwoo expects to receive net proceeds of about $18.7 million. The proceeds will be used for general corporate and working capital purposes, including funding existing and future projects and reducing debt
As the $45.5 million consideration represents 21.7% of Coliwoo's market capitalisation under SGX listing rules, the disposal is considered a major transaction and requires shareholder approval at an extraordinary general meeting.
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Sophia Lim, director of capital markets at Cushman & Wakefield, brokered the sale. "The sale of these River Valley serviced apartments reflects the continued strength of investor interest in Singapore's living sector, particularly for well-located and operationally established accommodation assets," she says.
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