Two Coliwoo Holdings serviced-apartment properties in River Valley being sold for S$45.8 million

[SINGAPORE] The LHN group’s listed co-living unit Coliwoo Holdings is selling two freehold River Valley Road properties for a total of S$45.8 million.

The properties, which operate under the Coliwoo brand, are being sold to a Singapore-incorporated company principally engaged in construction, indicated a bourse filing by Coliwoo Holdings on Thursday (Oct 1).

On completion, the two properties will be leased back to Coliwoo (RV), an indirect wholly owned subsidiary of Coliwoo Holdings, for three years. 

The Business Times understands that a third property, 268 River Valley Road, was also sold to the same buyer for S$21 million. The property is operated under a privately held Coliwoo management contract.

Coliwoo said that two assets 288 River Valley Road and 298 River Valley Road are to be sold for S$45.8 million in total, comprising a base purchase price of S$45.5 million, with 288 River Valley Road transacting at S$31.5 million and 298 River Valley Road at S$14 million.

This will allow the group to continue operating the two properties under the Coliwoo brand.

For the sale of the two properties directly held by Coliwoo, it expects to see estimated net proceeds of about S$18.7 million, after repayment of borrowings secured on the properties, transaction-related expenses and other completion adjustments. 

The three properties have a total of 73 keys, with commercial space on the first level and serviced apartments from the second to fourth levels.

The largest of the three, 288 River Valley Road, has 37 keys and a total gross floor area (GFA) of about 11,701 square feet (sq ft).

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The 268 River Valley Road property has 23 keys and a GFA of about 8,548 sq ft, while 298 River Valley Road has 13 keys and a GFA of about 6,149 sq ft.

The deal was brokered by Cushman & Wakefield (C&W). 

When contacted, Sophia Lim, director of capital markets at C&W, said that the sale reflects the “continued strength of investor interest in Singapore’s living sector”, particularly for well-located and operationally established accommodation assets.

She added: “With strong fundamentals supported by population growth, international talent inflows and sustained demand for flexible living solutions, investors continue to view the sector favourably for its income resilience and long-term growth prospects.

“The River Valley precinct remains especially attractive given its proximity to the CBD, Orchard Road and key lifestyle amenities.”

Sale-and-leaseback arrangement

The transaction is structured as a sale of Coliwoo’s entire shareholdings in wholly owned subsidiaries Coliwoo RV1 and Coliwoo RV2, which own 298 River Valley Road and 288 River Valley Road respectively.

Coliwoo said that the transaction will allow the group to unlock value from the two properties and recycle capital into “higher-yielding growth opportunities”, while strengthening its balance sheet through debt reduction.

It intends to use the estimated net proceeds of about S$18.7 million for general corporate and working capital purposes, including funding existing and future projects and debt reduction.

Coliwoo will seek shareholders’ approval for the proposed sale at an extraordinary general meeting, as the transaction is classified as a major transaction under SGX listing rules. This is because the aggregate consideration represents 21.7 per cent of Coliwoo’s market capitalisation.

Coliwoo had put seven freehold hospitality and living assets up for sale in March, with a total guide price of S$218.5 million, as it looked to recycle capital and pay down debt. 

The portfolio comprised the three River Valley properties, three assets in Balestier and a standalone building in Rangoon Road.

*Amendment note: The article has been updated for clarity.