CapitaLand Ascott Trust Buys Singapore Co-Living Asset for S$134 Million

Sale-and-Leaseback Structure

CapitaLand Ascott Trust announced Thursday it will acquire Coliwoo Midtown, a six-storey mixed-use co-living development in Singapore, at an agreed property value of S$134 million. The transaction will see all 212 rooms in the building move from Coliwoo's owned portfolio to its leased segment under a 10-year triple-net master lease arrangement.

According to Coliwoo, the structure allows the operator to unlock capital while retaining full operational control. Lease payments will be funded from operating cash flows, and the company's existing management team will continue to oversee day-to-day operations, community programming, and service delivery at the property.

The trust is acquiring the asset at a 4.1 percent EBITDA yield on a fiscal 2025 pro forma basis, according to the manager of CapitaLand Ascott Trust. The deal is projected to lift the trust's pro forma distribution per stapled security by 2.4 percent and will begin contributing to distribution income immediately upon completion.

Portfolio Rebalancing

The purchase increases CapitaLand Ascott Trust's living-sector portfolio to 19.5 percent of total portfolio value, moving closer to the trust's medium-term target allocation of 25 to 30 percent in living assets with the remainder in hospitality properties, according to Serena Teo, chief executive of the trust's managers.

Singapore's hospitality REITs have been gradually increasing exposure to alternative accommodation formats as traditional hotel demand becomes more cyclical. Co-living properties offer longer-term lease structures and more predictable cash flows compared to transient hotel stays, a trait that appeals to institutional capital seeking stable yield in high-cost urban markets.

Proceeds from the divestment of The Robertson House by The Crest Collection in Singapore are expected to fund the acquisition. Coliwoo stated the capital will support working capital requirements for existing projects and the continued expansion of its business.

Asset Background

Coliwoo Midtown commenced operations in March and represents the co-living operator's first new property since its mainboard listing on the Singapore Exchange. The building was repurposed from a former commercial structure that Coliwoo acquired in May 2024.

The transaction is scheduled to close in the fourth quarter, at which point CapitaLand Ascott Trust will formally enter into the master lease with Coliwoo Midtown. Under a triple-net lease structure, the tenant typically assumes responsibility for property taxes, insurance, and maintenance costs in addition to base rent, reducing the landlord's operational burden.

Market Context

The deal highlights a broader trend in Singapore's real estate sector, where operators with growth ambitions are monetizing mature assets to fund pipeline projects while institutional buyers seek exposure to niche residential formats. Co-living sits at the intersection of student housing, serviced apartments, and build-to-rent residential, targeting young professionals and digital nomads willing to trade space for location and community amenities.

CapitaLand Ascott Trust's strategy mirrors moves by other lodging-focused trusts across Asia that have diversified into student accommodation, senior living, and co-living over the past three years. These segments typically command lower acquisition yields than prime hotels but offer more resilient occupancy through economic cycles.

Stapled securities of CapitaLand Ascott Trust closed at S$0.865 on Wednesday, while Coliwoo shares ended at S$0.515. Both securities trade on the Singapore Exchange.