US: Singapore-based CapitaLand Ascott Trust (CLAS) has acquired the remaining 10 per cent stake in Standard at Columbia, a freehold student accommodation property in South Carolina.
CLAS has acquired in phases over three years. In June 2021, CLAS and its sponsor, The Ascott Limited (Ascott), jointly invested to own 90 per cent of the student accommodation property on a 50:50 basis and to develop the property. CLAS subsequently acquired Ascott’s 45 per cent stake in November 2022.
The earnings before interest, taxes, depreciation and amortisation (EBITDA) yield on total development cost is expected to be approximately seven per cent. This is higher than the 6.2 per cent 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.
The 678-bed Standard at Columbia serves more than 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 more than 90 per cent.
Serena Teo, CEO of CapitaLand Ascott Trust Management Limited and CapitaLand Ascott Business Trust Management Pte. Ltd. (the managers of CLAS), said: “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.”
