Recently listed co-living operator Coliwoo Holdings announced that it has entered into a sale and leaseback agreement involving the its 80% interest in its subsidiary, Coliwoo PP, which manages the Coliwoo Hotel Pasir Panjang, a co-living hotel property at 404 Pasir Panjang Road.
Under the agreement, the group will dispose of its 80% interest in Coliwoo PP. while simultaneously entering into a leaseback arrangement. This structure allows Coliwoo to continue operating the co-living hotel property, thereby maintaining its portfolio of keys under management.
In its announcement on Dec 19, the group says that this disposal is beneficial to the group and exemplifies its capital recycling strategy – crystallising capital appreciation in mature assets at opportune moments, then redeploying the proceeds to strengthen the balance sheet
and fund sustainable growth initiatives. "By unlocking the value tied up in the property while retaining operational rights through the leaseback arrangement, the group effectively transitions towards a more asset-light business model without compromising operational
excellence," says Coliwoo in its announcement.
The group will realise gross proceeds of $43.9 million and an estimated gain of $0.3 million is expected to be recognised for the upcoming FY2026, as fair value gains had been recognised in previous years. Net proceeds generated from the transaction, estimated at $15.3 million, are intended to repay part of the working capital loans and for general working capital to operate and expand its business.
"This allocation enables the group to optimise its debt structure, strengthen its financial position, and redeploy capital into projects or properties with better returns, thereby seizing new growth opportunities," says Coliwoo.
Coliwoo executive chairman & CEO Kelvin Lim says: "This sale-and-leaseback transaction exemplifies our disciplined approach to capital management. By crystallising the value embedded in our mature assets while retaining operational control, we achieve a strategic trifecta: unlocking liquidity, reducing leverage, and maintaining our operational footprint. This is a strategic pivot towards building a more resilient, capital-efficient business model. More importantly, our tenants experience zero disruption from this transaction, as our management team retains full control of operations, community programming, and service delivery. This is part of our continuous capital recycling initiatives. Over the next 18-24 months, we expect to unlock additional value from our portfolio, further strengthen our balance sheet, and redeploy capital into new acquisitions and growth initiatives that will drive sustainable long-term value creation."
