CapitaLand Investment (CLI) has established a new lodging private fund to target an S$800m (€553m) portfolio of assets in gateway cities in Asia-Pacific.

CapitaLand Ascott Residence Asia Fund II (CLARA II)  is CLI’s second private fund that focuses on serviced residence and co-living assets. It is a follow-up fund to the S$800m Ascott Serviced Residence Global Fund, a 50-50 venture with Qatar Investment Authority, launched in 2015.

CLI has also foreshadowed potentially launching other private lodging funds in other regions such as Europe.

In its first close CLARA II has obtained equity commitment from global institutional investors, including what it describes as “new relationships in private funds business” from Europe and Asia. CLI will have a 20% interest in the fund.

It will acquire a 50% stake in the 308-unit Lyf Bugis Singapore and a 100% stake in the 200-unit lyf Shibuya Tokyo in Japan. These two freehold assets, trading under lyf, the co-living brands of CLI, are scheduled to start trading from the mid-year and the third quarter of 2024 respectively.

Mak Hoe Kit, managing director, lodging private equity funds, CLI, said: “Investors’ interest in serviced residences and co-living properties have increased as these assets have proven to be resilient even during the COVID-19 pandemic. These properties generate stable income from long-stay guests and have the flexibility to take in guests on short stay to maximise revenue.”

Kevin Goh, chief executive officer for CLI Lodging and Ascott, said: “CLARA II will leverage Ascott’s global operational expertise, and sales and marketing network. This enables us to enhance the value of the assets and deliver sustainable returns to investors.”

Goh says investors would further benefit from the strong demand for lodging as international travel continued its upward trajectory. “Besides Asia Pacific, we see the potential to establish more lodging private funds in other regions such as Europe,” he said.

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