US: Ascott Residence Trust (ART) will acquire a freehold 1,005-bed student accommodation asset in Texas, USA for US$70.0 million, its third PBSA investment within seven months.
One of the newest student accommodation in the area, Wildwood Lubbock is a cottage-style property which serves more than 40,000 undergraduate and graduate students from Texas Tech University (TTU).
Beh Siew Kim, chief executive officer of Ascott Residence Trust Management said: “The acquisition of our third student accommodation asset is in line with ART’s strategy to acquire assets with longer length of stay and diversify our portfolio from traditional hospitality assets, further increasing ART’s resilience and stable income. Leases are typically for a year and Wildwood Lubbock will start contributing income immediately. Despite COVID-19, Wildwood Lubbock is 100 per cent leased for the 2021 academic year and there is minimal upcoming private student accommodation supply.”
“With Wildwood Lubbock, ART will expand its longer-stay portfolio to about 11 per cent, keeping us on track to have student accommodation and rental housing properties constitute about 15 to 20 per cent of our total property value in the medium term. Since the expansion of ART’s investment mandate to include student accommodation assets in January 2021, ART has committed to invest a total of about S$379 million on three prime student accommodation assets in USA and three rental housing properties in Sapporo, Japan at an average EBITDA yield of about five per cent. Following this acquisition, ART’s gearing would remain unchanged at 35.9 per cent. ART continues to be in a strong financial position to seek accretive investments in more longer-stay lodging assets and create greater value for our Stapled Securityholders,” added Beh.
