Ascott Residence Trust (ART) is proposing to acquire nine quality student accommodation, serviced residences and Build to Rent properties across five countries from its sponsor, The Ascott Limited. At an estimated total capitalised cost of S$318.3m, the yield-accretive acquisition is set to increase ART’s distribution by S$9.2m and its pro forma FY 2021 Distribution per Stapled Security by 2.8%.
In South Carolina, ART is acquiring a 45% stake in Standard at Columbia, a purpose-built student accommodation (PBSA) property. Student accommodation properties typically have an average length of stay of about one year. Standard at Columbia is expected to perform well, given its prime location and growing student population. ART’s portfolio of operating student accommodation properties in the USA have achieved a strong occupancy rate of over 95%. Currently under development, Standard at Columbia topped out in 2Q 2022 and is expected to complete in Q2 2023.
Located in South Carolina, USA, the 247-unit (679-bed) Standard at Columbia will serve over 35,000 undergraduate and graduate students from the nearby University of South Carolina (USC), the largest university in the state. In June 2021, ART and The Ascott Limited jointly invested to own 90% of the asset.
The freehold PBSA development will deliver fully furnished studios and one- to five-bedroom apartments. Each unit comes with a fully equipped shared kitchen with appliances including a washer and dryer. Community amenities include a fitness centre, study lounges, coffee bar, and a jumbotron TV on an elevated amenity deck with a swimming pool and cabanas. Located close to food and entertainment options, Standard at Columbia will be on a management contract when the scheme completes.
ART’s stake in Standard at Columbia is one of nine acquisitions announced by the company. Other properties are predominantly located in Asia-Pacific and include seven assets in Australia, Japan and Vietnam, and one in France. The acquisition of the nine properties, with a total of 1,018 units, will grow ART’s total assets to S$8.3bn as of 31 December 2021 on a pro-forma basis. Post-acquisition, ART’s portfolio will exceed 100 properties, with over 18,000 units across 47 cities and 15 countries.
“We are proposing to acquire nine quality assets that will increase ART’s stable income and further strengthen the resilience of our portfolio, demonstrating our focus to deliver long-term value for our Stapled Securityholders.”Ms Serena Teo, Chief Executive Officer, Ascott Residence Trust Management Limited and Ascott Business Trust Management Pte. Ltd.
The acquired properties will also increase the proportion of ART’s green-certified properties from approximately 35% to 38% of its global portfolio by square metre. The Standard at Columbia PBSA is expected to be green-certified before the end of 2023. It will contribute to ART’s sustainability targets of greening 50% of its global portfolio by 2025 and 100% of its global portfolio by 2030.
“The acquisition is set to boost ART’s proportion of green-certified properties, reinforcing our focus on sustainability. ART continues to seek yield-accretive investments while remaining committed to sustainability and taking a disciplined approach in managing our capital and costs.”Ms Serena Teo, Chief Executive Officer, Ascott Residence Trust Management Limited and Ascott Business Trust Management Pte. Ltd.