Felicia Tan Thu, Jun 02, 2022
The Ascott Limited, CapitaLand Investment’s (CLI) wholly-owned lodging business unit, is acquiring its first lyf-branded co-living property in Sydney, Australia.
The acquisition of the freehold asset is made via the Ascott Serviced Residence Global Fund (ASRGF), Ascott’s private equity fund with Qatar Investment Authority.
This is the fund’s third investment in 2022, following the acquisition of Somerset Hangzhou Bay Ningbo and Citadines Canal Amsterdam in March.
The latest acquisition will bring the total number of properties held under the fund to 11, with about 2,200 units.
The fund currently has five operational properties, Ascott Sudirman Jakarta, La Clef Champs-Élysées Paris, Citadines Islington London, lyf Funan Singapore and Quest NewQuay Docklands Melbourne.
To date, the fund has invested in 12 properties for close to US$500 million ($686.5 million). According to Ascott, the fund has since divested its first property at returns that outperformed its expected underwriting.
lyf Bondi Junction Sydney
The new co-living property has a total of 197 units. It will be named lyf Bondi Junction Sydney, and it is slated to open in 2024. The new property, which is located in Sydney’s fifth largest business district, Bondi Junction, is set to meet the lodging needs of transient young professionals, business and leisure travellers in the city.
The property is a short drive to Sydney’s central business district (CBD) and is a seven-minute drive away from the city’s iconic Bondi Beach.
In addition to the acquisition of lyf Bondi Junction Sydney, Ascott has opened its first lyf property in Melbourne, Australia.
The 105-unit lyf Collingwood Melbourne is just a two-minute walk away from Melbourne’s Smith Street, and is located just 10 minutes by tram to the city’s CBD.
Kevin Goh, CLI’s CEO for lodging, says, “As a vertically-integrated global lodging business with a strong foothold in Asia, Ascott is able to leverage our full suite of real estate investment and management capabilities to add another quality asset to ASRGF’s portfolio”.
“lyf has proven to not only be a popular but resilient brand. lyf one-north Singapore, owned by Ascott Residence Trust, has a strong occupancy rate of about 90% since its opening in November 2021. lyf Funan Singapore, which is owned by ASRGF, opened in 2019 and it also enjoys a robust average occupancy rate of almost 90%, outperforming its peers despite Covid-19,” he adds.
In addition, Goh says Ascott is set to “raise the bar” for the co-living sector in Australia as the group expands the lyf brand in the country.
“We continue to see attractive opportunities to grow our lyf brand through our private funds and Ascott Residence Trust as well as via management contracts,” he continues.
“Tapping our strong deal sourcing capabilities and extensive business network, we were able to access this attractive off-market acquisition,” says Mak Hoe Kit, Ascott’s managing director for lodging private equity funds and head of business development.
“lyf Bondi Junction Sydney is a rare purpose-built asset in a highly sought-after location for business and tourism. We expect the co-living property to perform well as Sydney boasts a vibrant start-up ecosystem and is amongst the top gateway cities globally. Most of ASRGF’s investments are off-market and sourced via our global presence and strong business development teams on the ground,” he adds. “This, combined with our expertise across the full value chain of investment, asset and fund management as well as award-winning lodging operations, enables us to drive returns from divestments that exceed expected underwriting. As the full deployment of ASRGF draws near, we continue to seek like-minded capital partners to invest in other co-living and serviced residence opportunities, which have proven to be resilient.”
Shares in CapitaLand Investment closed 5 cents lower or 1.27% down at $3.90 on June 1.