Ascott Residence Trust Secures Third Student Housing Asset With US $ 70 Million Acquisition


Ascott Residence Trust (ART) to Acquire 1,005-Bed Freehold Student Housing Asset in Texas, US for US $ 70.0 Million[1] (S $ 93.8 million[2]), his third investment in student accommodation in the space of seven months. One of the area’s newest student accommodation, Wildwood Lubbock is a cottage-style property that accommodates over 40,000 undergraduate and graduate students at Texas Tech University (TTU). The accretive acquisition will increase ART’s pro forma distribution per stapled security for fiscal 2020 by approximately 1.5%[3]. EBITDA[4] the yield should be 5.1%. The transaction will be finalized on September 21, 2021.

Ms. Beh Siew Kim, CEO of Ascott Residence Trust Management Limited and Ascott Business Trust Management Pte. Ltd. (the managers of ART) declared: “The acquisition of our third student accommodation asset is part of ART’s strategy of acquiring assets with a longer stay and diversifying our portfolio from traditional hotel assets, further increasing the resilience of ART and its stable income. Leases are generally for one year and Wildwood Lubbock will begin generating revenue immediately. Despite COVID-19, Wildwood Lubbock is 100% leased for the 2021 academic year and there is minimal upcoming private student housing supply. “

“With Wildwood Lubbock, ART will expand its long-stay portfolio to approximately 11%, keeping us on track for student housing and rental housing to represent approximately 15-20% of our total property value over the medium term. Since the expansion of ART’s investment mandate to include student housing assets in January 2021, ART has committed to investing a total of approximately S $ 379 million in three premier student housing assets in the United States and three rental apartment buildings in Sapporo, Japan, with an average EBITDA yield. about 5%[5]. Following this acquisition, ART’s gearing would remain unchanged at 35.9%[6]. ART continues to be in a strong financial position to seek profitable investments in longer hosting assets and create greater value for our stapled security holders ”, Ms. Beh added.

Opened in 2017, Wildwood Lubbock is close to TTU, one of the top public research universities[7] with the status of elite university athletics. TTU’s student body has grown steadily at a compound annual growth rate of 2.5% over the past decade. The total number of registrations for the 2020 academic year also increased by 4.0% in one year despite COVID-19. TTU is the sixth largest university in Texas in terms of student population, with local students making up 98% of its total student body. TTU’s track program also participates in the Big 12 Conference, one of the National Collegiate Athletic Association’s “Power 5” track and field conferences.

Wildwood Lubbock has 1,005 beds spread over 294 units, comprising two to four bedroom apartments and each bedroom is equipped with an en suite bathroom. Student accommodation has upscale on-site amenities such as Lubbock’s largest resort-style swimming pool with jetted hot tubs, a swim-up bar, outdoor cabanas with gas grills and fire pits. The student accommodation also has a gynamisum, study rooms, a club house with a theater room for match days, an animal park as well as basketball and volleyball courts. With most students driving to campus, Wildwood Lubbock offers nearly 1,100 parking lots. Students can also access the heart of the TTU campus via a shuttle bus. Wildwood Lubbock will be managed by an independent third party operator.

For more information on student accommodation, please see the appendix.

Increase ART’s stable income with a third investment in student housing

Prior to the acquisition of Wildwood Lubbock, ART acquired freehold Paloma West Midtown in Atlanta, Georgia, United States in February 2021. Student housing was acquired for US $ 95 million (US $ 126.3 million Singaporeans) with an EBITDA yield of around 5%. Serving nearly 40,000 Georgia Institute of Technology students, the 525-bed Paloma West Midtown is 100%[8] rented for the academic year 2021.

In June 2021, ART and its sponsor, The Ascott Limited, announced that they would jointly invest and develop freehold student accommodation in South Carolina, United States. ART will invest $ 55.2 million[9] (S $ 73.4 million) in the 678-bed student housing that will serve more than 35,000 students at neighboring South Carolina University. Construction of student housing began in Q3 2021 and is expected to be completed in Q2 2023. Once stabilized, the return on EBITDA is expected to be around 6.2%[10].

Appendix – About the student housing asset

[1] The consideration for the purchase takes into account the agreed value of the property, which was determined on the basis of a willing buyer and seller and derived based on the independent valuation dated September 7, 2021 by Colliers. International Valuation and Advisory Services LLC at $ 72.0 million (equivalent to approximately S $ 96.5 million) [2] Based on the exchange rate of US $ 1 to S $ 1.34 [3] Based on the pro forma distribution for fiscal year 2020 by stapled security. The pro forma is based on ART’s audited financial statements for the year ended December 31, 2020, assuming that (1) the acquisition was completed on January 1, 2020 and ART has owned and operated the building until as of December 31, 2020 and (2) the acquisition will be financed 40% by debt and 60% by equity [4] Earnings before net interest charges, taxes, depreciation and amortization [5] For student housing development in South Carolina, USA, the EBITDA return is a target return on a stabilized basis [6] Based on ART’s unaudited financial statements as of June 30, 2021 and assuming the acquisition was completed on June 30, 2021 [7] TTU has an “R1” designation by the Carnegie Commission on Higher Education, indicating “very high” research activity [8] In August 2021 [9] Includes ART’s investment in the initial 45% stake, the estimated cost of the additional 5% stake that ART will acquire at fair market value, and other transaction-related expenses [10] Based on the total ART investment

About Ascott Limited

The Ascott Limited (Ascott) is a Singaporean company that has grown to become a leading international accommodation owner-operator. Ascott’s portfolio covers more than 200 cities in more than 30 countries in Asia Pacific, Central Asia, Europe, Middle East, Africa and the United States.

Ascott has over 73,000 units in operation and over 54,000 units in development, for a total of over 127,000 units in 790 properties.

The company’s furnished apartment, colivings and hotel brands include Ascott The Residence, The Crest Collection, Somerset, Quest, Citadines, lyf, Préférence, Vertu, Harris, Citadines Connect, Fox, Yello, Fox Lite and POP !.

Ascott’s loyalty program, Ascott Star Rewards, offers exclusive benefits to its members when they book directly with Ascott for their stays at its participating properties.

Ascott, a wholly owned subsidiary of CapitaLand Investment, pioneered the first world-class furnished apartment in Asia-Pacific with the opening of The Ascott Singapore in 1984. Today, the company has more than 30 years of experience. industry experience and award-winning brands that enjoy global recognition.

For more information, please visit www.discoverasr.com.

About CapitaLand Investment

Based and listed in Singapore, CapitaLand Investment (CLI) is one of the world’s leading real estate investment managers (REIM) with a strong presence in Asia. As of June 30, 2021, CLI had approximately S $ 119.0 billion of real estate assets under management and approximately S $ 83.0 billion of real estate funds under management (FUM) held through six real estate investment companies. and listed commercial trusts, and more than 20 private funds. in Asia-Pacific, Europe and the United States. Its diversified real estate asset classes cover integrated developments, retail, office, accommodation and new economy sectors such as business parks, industry, logistics and data centers.

CLI aims to increase its FUM and expense revenues through its full range of investment management and operations capabilities. As the listed investment management business arm of the CapitaLand group, CLI has access to the development capabilities and pipeline investment opportunities of the development arm of CapitaLand. Being part of CapitaLand’s well-established ecosystem sets CLI apart from other REIMs.

As a member of the CapitaLand group, CLI places sustainability at the heart of its activities. As a responsible real estate company, CLI contributes to the environmental and social well-being of the communities in which it operates, as it brings long-term economic value to its stakeholders.

Visit http://www.capitalandinvest.com/ for more information.

About Michael B. Billingsley

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