In June 2021, ART and TAL jointly invested in Standard at Columbia, a freehold development PBSA near the University of South Carolina (USC). ART and TAL took a 45% stake each in Standard at Columbia, with the developer retaining 10%. Construction started in 3Q2021 and is expected to complete in 2Q2023. Upon stabilisation, the ebitda yield is expected to be approximately 6.2%.
Hospitality trusts are viewed as the most volatile in the Singapore REIT (S-REIT) sector, as evidenced by their performance during 2020 and 2021, except Ascott Residence Trust (ART). (See Table 1). The reason is because ART is not just a hospitality trust. Since its inception in 2006, it has had — on and off — a portfolio of Japanese rental housing. And because its assets are mainly serviced residences with a few hotels, its sponsor, CapitaLand Investment (CLI) and The Ascott (TAL) which is 100% owned by CLI, describes ART as a lodging REIT and part of its lodging business.
During the pandemic, ART continued to focus on the long-stay sector, using capital gains to mitigate the volatility of its distributions per stapled security (DPS). In January 2021, ART acquired its first purpose-built student housing (PBSA) in the US state of Georgia for US$95 million followed by a swift succession of acquisitions in the same asset class.
