Coliwoo disposes Pasir Panjang co-living hotel space in S$43.9 million sale-and-leaseback deal

[SINGAPORE] Coliwoo has entered into a sale-and-leaseback agreement to dispose of a co-living hotel property in Pasir Panjang owned and managed by its subsidiary Coliwoo PP.

The co-living operator and Globalpoint Far East have agreed to sell the entire issued and paid-up share capital of Coliwoo PP to CWL Properties for an aggregate consideration of S$43.9 million plus the unit’s adjusted net value. The parties own 80 per cent and 20 per cent of Coliwoo PP, respectively.

The proposed deal will allow Coliwoo to unlock value tied up in Coliwoo Hotel Pasir Panjang while retaining operational rights via the leaseback arrangement, the company said on Thursday (Dec 18).

It will continue operating the property located at 404 Pasir Panjang Road, thereby maintaining its portfolio of keys under management.

Concurrent with the sale, Coliwoo will enter a rental agreement with Coliwoo PP for a period of six years, commencing from the date immediately after the transaction closes.

Kelvin Lim, Coliwoo’s executive chairman and chief executive, said that the company’s management team will retain full control of operations, community programming and service delivery, such that tenants of the property will experience no disruption from the transaction.

Following the deal, which is expected to complete in FY2026, Coliwoo PP will cease to be a subsidiary of the company.

The transaction is expected to increase Coliwoo’s cashflow, with the company expected to get S$35.1 million from the sale of its Coliwoo PP stake.

It plans to use the estimated net proceeds of S$15.3 million to repay part of the working capital loans owed to its immediate holding company LHN Group and for general working capital, to operate and expand its business.

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This allocation will help to optimise its debt structure, strengthen its financial position and redeploy capital into projects or properties with better returns, Coliwoo said.

As part of its transition to a more asset-light business model and capital recycling strategy, the deal also helps it to realise fair value gains of properties and channel them into its other businesses, it said.

Coliwoo noted that it has already acknowledged the fair value gain from the underlying property of Coliwoo PP in previous financial years and expects to recognise an estimated gain of around S$300,000 once the transaction completes. The sum is calculated with reference to the carrying value of Coliwoo PP as at Sep 30, 2025.

Lim added that it expects to unlock additional value from its portfolio over the next 18 to 24 months.

In terms of financial effects, Coliwoo’s net tangible assets per share is expected to increase to S$0.4041 after the transaction closes, from S$0.403 previously. Its earnings per share is set to be at S$0.0462 post-transaction, compared with S$0.0482 before.

Previously, Coliwoo and Globalpoint Far East inked a non-binding term sheet with an independent buyer to sell Coliwoo PP, The Business Times reported in September.

Coliwoo shares closed Thursday 1.8 per cent or S$0.01 lower at S$0.55, before the news.