The property’s location in Changi Business Park provides access to an established corporate tenant base
[SINGAPORE] Co-living operator Coliwoo has inked a deal to acquire a hotel property from ESR-Real Estate Investment Trust (Reit) for about S$101 million.
The deal, announced on Friday (Jan 30) through a bourse filing, involves the hotel strata lot located at 2 Changi Business Park Avenue 1. The lot comprises a hotel block featuring more than 250 rooms and retail space at the ground floor.
The property used to be occupied by hotel Park Avenue Changi.
In a separate bourse filing, mainboard-listed Coliwoo noted that the acquisition is structured as a leasehold estate with a tenure commencing from the completion of the acquisition. The group targets to complete the transaction by the end of March.
The tenure expires one day prior to the expiry of the head lease with JTC Corporation – originally 30 years commencing from Feb 1, 2008 – but includes an option to renew for another 30 years.
The Reit manager noted that the divestment is part of its strategy to divest non-core assets, and is not expected to have material impact on the Reit’s net asset value and distribution per unit for the financial year ending Dec 31, 2025.
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It added the hotel strata lot had no income contribution since September last year, following the expiry of the master lease agreement.
Following the completion of the divestment, ESR-Reit will continue to own the business park, retail and convention centre components of ESR BizPark @ Changi – which represents around 81 per cent of total gross floor area of the integrated development.
Coliwoo noted that the asset’s location in Changi Business Park provides access to an “established corporate tenant base”.
It added that the close proximity of the asset to Changi Airport will enable the property to serve multiple market segments, including transit passengers, aviation personnel and professionals engaged in the ongoing Terminal 5 construction project.
“These locational attributes position the acquisition favourably within Singapore’s expanding accommodation market,” it noted.
Shares of Coliwoo closed flat at S$0.60, while units of ESR-Reit closed 0.4 per cent or S$0.01 lower at S$2.73 on Friday, before the announcement.
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