CAPITALAND Ascott Trust (Clas) has acquired the remaining 10 per cent stake in a 678-bed freehold student accommodation property in South Carolina.
On Tuesday (Jun 4), its managers said they expect the acquisition to generate an earnings before interest, taxes, depreciation, and amortisation (Ebitda) yield on total development costs of about 7 per cent.
They also noted that this is higher than the 6.2 per cent Ebitda yield that was first estimated in 2021, assuming the portfolio’s stable performance.
The acquisition was funded by proceeds from Clas’ earlier divestments.
Known as Standard at Columbia, the property serves over 35,000 students from the University of South Carolina.
Clas and its sponsor, The Ascott Limited, jointly acquired a 90 per cent stake in Standard at Columbia in June 2021 on a 50:50 ownership basis to develop the property. The Ascott’s 45 per cent stake was subsequently acquired by Clas in November 2022.
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Standard at Columbia started operating in August 2023 with an occupancy rate of over 90 per cent.
As at end May 2024, the property’s pre-leasing occupancy rate was 99 per cent for the upcoming academic year.
“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,” the managers’ chief executive officer Serena Teo said.
The recent acquisition takes Clas’ total portfolio value in longer-stay assets, such as student accommodation and rental housing properties, to 17 per cent.
The stapled group expanded into the student accommodation segment in January 2021. It has nine operating student accommodation properties, with eight properties in the US and one in Japan, totalling more than 4,500 beds.
Stapled securities of Clas ended flat at S$0.895 on Monday.
