It will receive proceeds of about S$320 million from the sale

 

PROPERTY company Wee Hur : E3B 0% has confirmed earlier news reports that it would be selling its Australian-focused purpose-built student accommodation (PBSA) portfolio for A$1.6 billion (S$1.4 billion).

 

In its latest bourse filings on Monday (Dec 16), Wee Hur said that the fund&rsquo s trustee, Perpetual Corporate Trust, agreed to sell all seven of its assets in the PBSA portfolio to global real estate investor Greystar.

 

This marks the successful execution of Wee Hur&rsquo s long-term strategy in the PBSA sector, said the company in a statement.

 

The sale announcement comes two months after it refuted an Oct 15 article in The Australian Financial Review, which reported that Greystar was acquiring its PBSA business in Australia.

 

The property company had said previously that there were no significant transactions related to its PBSA business in the country, and that it was in early-stage confidential discussions with a third party, which &ldquo may or may not lead to a transaction&rdquo .

 

Currently, Wee Hur holds a 50.1 per cent stake in the PBSA portfolio, and GIC-linked investor Reco Weather, the remaining 49.9 per cent.

 

While the transaction involves the trustee disposing 100 per cent of all the PBSA assets in the portfolio, Wee Hur will still retain an indirect stake because its Australia subsidiary will acquire 13 per cent of Greystar&rsquo s equity.

 

Reco Weather, however, will no longer have any interest in the fund, which consists of seven PBSA properties in Brisbane, Melbourne, Sydney, Adelaide and Canberra.

 

Wee Hur will receive proceeds of about S$320 million from the sale, pending shareholders&rsquo consent and regulatory approvals. The company expects the transaction to be completed in the first half of 2025.

 

Including Wee Hur&rsquo s remaining 13 per cent interest, which is being considered at S$120 million, the PBSA portfolio would be valued at S$439.9 million.

 

Given that the book value of Wee Hur&rsquo s 50.1 per cent equity interest in the fund is S$403.4 million, the proposed disposal of these assets would result in an estimated gain of S$36.6 million, said the company in its bourse filings.

 

It also said that Greystar expressed its interest in acquiring the PBSA portfolio back in October 2023.

 

As the offer from Greystar included a sale and an opportunity to be in a strategic partnership, the company felt that the offer would enhance its position and unlock value of its remaining stake in the portfolio.

 

The sale price also represents a substantial uplift in the value of the PBSA properties and would enable Wee Hur to realise part of its investment in the fund, which can then be recycled and reallocated into other investments or used for general working capital purposes, it said.

 

This includes reinvesting in existing businesses or exploring high-growth areas such as its new core business, KK39, which focuses on venture capital, private equity and private-credit investments.

 

Following this assessment, the fund&rsquo s management committee approved the proposed sale on Dec 13, with unitholders representing more than 50 per cent of the holdings voting in favour of the disposal.

 

Wee Hur said in a statement that this proposed divestment is the culmination of a decade of strategic growth and development. The company had entered the PBSA market with its first asset in Brisbane in 2015.

 

Goh Wee Ping, chief executive officer of Wee Hur&rsquo s fund management arm, Wee Hur Capital, said that this divestment would deliver superior returns for its investors.

 

&ldquo In 2021 and 2022, amid global uncertainty, we acted decisively to secure liquidity and certainty through our successful recap with Reco.&rdquo

 

He added: &ldquo Two years later, as the PBSA market rebounded and our portfolio approached full stabilisation, we capitalised on yet another opportunity to unlock maximum value for our stakeholders through this landmark transaction.&rdquo

 

The company also announced that it would lift its trading halt. It had previously requested one on Friday morning.