The Ascott Limited, CapitaLand Investment’s (CLI) wholly-owned lodging business unit, has acquired two properties in Ningbo, China and Amsterdam, Netherlands for a total of around $190 million.
The properties were acquired through Ascott’s US$600 million ($813.7 million) private equity fund with Qatar Investment Authority, Ascott Serviced Residence Global Fund (ASRGF).
When fully deployed, the two new properties will bring Ascott’s total funds under management (FUM) to $9 billion.
The fund acquired two residential towers on a turnkey basis in Ningbo. When completed, the project will open as the Somerset Hangzhou Bay Ningbo in 2025 with a total of 206 units. The serviced residence is located in Ningbo’s Hangzhou Bay New Town at the geographic centre of the Yangtze River Delta, which is China’s economic powerhouse.
Somerset Hangzhou Bay Ningbo is also adjacent to the district’s advanced manufacturing industrial zone where many Fortune 500 companies have established their facilities, which will potentially generating corporate demand for the serviced residence.
In Amsterdam, the fund has acquired a rare freehold asset, which will be refurbished and unveiled as Citadines Canal Amsterdam in 2023. The 93-unit serviced residence is located with the city’s Canal District, a renowned UNESCO World Heritage site. The property is also closed to several regional offices of multinational corporations (MNCs).
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Following the acquisitions, the fund will have a total of 10 properties with close to 2,000 units under its belt. So far, the fund has five operational properties, which are Ascott Sudirman Jakarta, La Clef Champs-Élysées Paris, Citadines Islington London, lyf Funan Singapore and Quest NewQuay Docklands Melbourne.
Properties under development include lyf Gambetta Paris, Ascott’s first lyf-branded coliving property in Europe, and Somerset Metropolitan West Hanoi.
“Ascott’s key differentiator is our unique position as a vertically-integrated global lodging business with a strong foothold in Asia. We have expertise across the full value chain, from deal sourcing, investment, asset and fund management, as well as award-winning hospitality operations to generate the required returns for our capital partners,” says Kevin Goh, CLI’s CEO for lodging.
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“We will continue to work with our capital partners to grow our FUM through investment vehicles such as ASRGF and our newly established student accommodation development venture (SAVE), adding to the fee income stream from our asset management and property management capabilities,” Goh adds.
Mak Hoe Kit, Ascott’s managing director for lodging funds and head of business development and investment asset management, says: “The acquisitions of the two prime assets through ASRGF are a testament of our proven track record in deal sourcing and origination. The operational properties held under ASRGF have remained resilient amid Covid-19, supported by their excellent location and robust base of long-stay corporate guests and a strong domestic leisure travel market.”
“The first property that was divested outperformed our expected underwriting. As we near the full deployment of ASRGF, we are exploring new opportunities to establish more lodging funds. Leveraging Ascott’s global presence and experience across different types of lodging assets, we are focused on creating the right fund to meet the needs of our wide network of partners,” he adds.
Shares in CLI closed 4 cents higher or 1.04% up at $3.89 on March 22.
