A CapitaLand subsidiary, Ascott Residence Trust (ART), has diversified into student housing with a $95m (€78m) acquisition.
ART has acquired Signature West Midtown, a property with 525 beds across 183 units in Atlanta, Georgia.
Bob Tan, chairman of Ascott Residence Trust Management Limited (ARTML) and Ascott Business Trust Management, said: “As part of our capital recycling strategy, we divested two properties at the end of last year with two more to be completed in the first quarter of 2021. Proceeds from the sale of these properties will be deployed into higher-yielding assets.”
Tan said the expansion of the Ascott investment mandate to include student accommodation would further enhance the stability of ART’s portfolio.
Student accommodation would offer a new platform for growth and diversify the Ascott’s portfolio beyond traditional hospitality assets, mitigating near-term headwinds faced in the hospitality sector, he said.
The trust had remained resilient during COVID-19 mainly due to long-stay guests of Ascott serviced residences and rental housing properties, he said. Acquisition of Signature West would increase the trust’s holdings in long-stay properties.
“ART will continue to seek opportunities for quality student accommodation assets in key markets with strong student population growth. We will also look at expanding our rental housing portfolio,” Tan said.
Despite Covid-19, said Beh Siew Kim, chief executive officer of ARTML and Ascott Business Trust Management, said occupancy rate of Signature West Midtown, which housed mostly domestic students studying at Georgia Tech was around 95%.
Beh said further growth was expected, with plans to develop Technology Enterprise Park, a research and commercial hub nearby which would drive up economic activities and general rent levels around West Midtown.
To read the digital edition of the latest IPE Real Assets magazine click here.