Source: The Ascott Limited

CapitaLand Ascott Trust (CLAS) has acquired the remaining 10% stake in Standard at Columbia, a freehold student accommodation property in South Carolina, United States of America (USA). The earnings before interest, taxes, depreciation and amortisation (EBITDA) yield on total development cost is expected to be approximately 7%. This is higher than the 6.2% EBITDA yield that was projected in 2021 on the basis that the property has achieved stable performance. The acquisition is funded by proceeds from CLAS’ earlier divestments.

CLAS acquired Standard at Columbia in phases over three years. In June 2021, CLAS and its sponsor, The Ascott Limited (Ascott), jointly invested to own 90% of the student accommodation property on a 50:50 basis and to develop the property. CLAS subsequently acquired Ascott’s 45% stake in November 2022.

The 678-bed Standard at Columbia serves over 35,000 undergraduate and graduate students from the nearby University of South Carolina (USC), the largest university in the state. It turned operational in August 2023 with an occupancy rate of over 90%. Standard at Columbia is one of the best performing student accommodation properties serving the USC, commanding one of the highest rents per bed1. For the upcoming academic year (AY) 2024-2025, the pre-leasing occupancy rate has reached 99% as at end May, with rental growth of about 4% compared to AY 2023-2024.

The acquisition of Standard at Columbia is in line with CLAS’ strategy to marry stability and growth to generate long-term returns to Stapled Securityholders. Recycling capital from our divestment proceeds into this longer-stay asset with strong operating performance will further boost our returns. With an average length of stay of about one year, student accommodation properties enhance CLAS’ stable income stream and strengthen our portfolio’s resilience against macroeconomic uncertainties. It diversifies our portfolio which also comprises hospitality assets such as serviced residences or hotels that allow us to capture travel demand for growth income. Ms Serena Teo, Chief Executive Officer of CapitaLand Ascott Trust Management Limited and CapitaLand Ascott Business Trust Management Pte. Ltd. (the Managers of CLAS)

We actively enhance the quality of CLAS’ portfolio through accretive acquisitions, opportunistic divestments and asset enhancements. In 1Q 2024, we completed the acquisition of a rental housing property in Japan. We will continue to seek accretive investments in properties in prime locations within key capital cities with strong demand drivers and selectively undertake development projects with higher yields. In the last year, we announced divestments of S$408.1 million comprising 10 mature assets2 at a premium to book value and an average exit yield of about 3.8%3. In addition, we have seven properties4 that are undergoing or will undergo asset enhance initiatives (AEI). When completed, the AEIs will uplift the value and profitability of our portfolio, positioning CLAS for sustained growth, added Ms Teo.

CLAS’ student accommodation portfolio

CLAS expanded into the student accommodation segment in January 2021. Today, CLAS has nine operating student accommodation properties, with eight properties in the USA and one in Japan totalling more than 4,500 beds.

As at 1Q 2024, CLAS’ eight operating student accommodation properties in the USA achieved year-on-year (y-o-y) rental growth of about 5.5%5 for the current academic year. Excluding Wildwood Lubbock in Texas, which is undergoing light refurbishment to refresh the property, rental growth is about 6.5%[5] y-o-y and the average occupancy rate is about 95%. For the AY 2024-2025, pre-leasing of the student accommodation properties continues to be favourable, with several properties pacing ahead of their respective markets.

After the acquisition, about 17% of CLAS’ total portfolio value is in longer-stay assets such as student accommodation and rental housing properties. CLAS’ medium-term asset allocation target is to have a stable income base with 25-30% of its total portfolio value in longer-stay assets, and the remaining 70-75% in hospitality assets such as serviced residences or hotels for growth income.

1. RealPage, April 2024.
2. The 10 properties comprise four properties in regional France, two properties in Australia, three properties in Japan and one property in Singapore.
3. The exit yield of the France and Australia properties is computed based on FY 2022 EBITDA. The exit yield of the Japan portfolio is not meaningful and has not been included in the average exit yield computation as the properties were largely closed in 2022. If included, the average exit yield will be about 2.8%.
4. The seven properties are Citadines Holborn-Covent Garden London, Citadines Les Halles Paris, Citadines Kurfürstendamm Berlin, La Clef Tour Eiffel Paris, Temple Bar Hotel, The Cavendish London and Novotel Sydney Central.
5. Excludes Standard at Columbia which began receiving students in August 2023.

About The Ascott Limited

Since pioneering Asia Pacific's first international-class serviced residence with the opening of The Ascott Singapore in 1984, Ascott has grown to be a trusted hospitality company with more than 940 properties globally. Headquartered in Singapore, Ascott's presence extends across more than 220 cities in over 40 countries in Asia Pacific, Central Asia, Europe, the Middle East, Africa, and the USA.

Ascott's diversified accommodation offerings span serviced residences, co-living properties, hotels and independent senior living apartments, as well as student accommodation and rental housing. Its award-winning hospitality brands include Ascott, Citadines, lyf, Oakwood, Quest, Somerset, The Crest Collection, The Unlimited Collection, Preference, Fox, Harris, POP!, Vertu and Yello; and it has a brand partnership with Domitys. Through Ascott Star Rewards (ASR), Ascott's loyalty programme, members enjoy exclusive privileges and offers at participating properties.

A wholly owned business unit of CapitaLand Investment Limited, Ascott is a leading vertically-integrated lodging operator. Harnessing its extensive network of third-party owners and in-market expertise, Ascott grows fee-related earnings through its hospitality management and investment management capabilities. Ascott also expands its funds under management by growing its sponsored CapitaLand Ascott Trust and private funds.

For more information on Ascott's industry record of 40 years and its sustainability programme, please visit www.discoverasr.com/the-ascott-limited. Connect with us on Facebook, Instagram, TikTok and LinkedIn.

About CapitaLand Investment Limited

Headquartered and listed in Singapore, CapitaLand Investment Limited (CLI) is a leading global real estate investment manager (REIM) with a strong Asia foothold. As at 30 September 2023, CLI had S$133 billion of real estate assets under management, and S$90 billion of real estate funds under management (FUM) held via six listed real estate investment trusts and business trusts, and more than 30 private vehicles across Asia Pacific, Europe and USA. Its diversified real estate asset classes cover retail, office, lodging, business parks, industrial, logistics and data centres.

CLI aims to scale its FUM and fee-related earnings through fund management, lodging management and its full stack of operating capabilities, and maintain effective capital management. As the investment management arm of CapitaLand Group, CLI has access to the development capabilities of and pipeline investment opportunities from CapitaLand's development arm.

As a responsible company, CLI places sustainability at the core of what it does and has committed to achieve Net Zero carbon emissions for scope 1 and 2 by 2050. CLI contributes to the environmental and social well-being of the communities where it operates, as it delivers long-term economic value to its stakeholders.

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

Joan Tan
Assistant Vice President, Corporate Communications
+65 6713 2864
The Ascott Limited