Ascott establishes a new student accommodation development venture with Riyad Capital
03 Feb 2022
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With the latest acquisition of the student accommodation asset in Lincoln, Nebraska, Ascott has a total of nine student accommodation assets to date. The seven operating assets are new with an average age of two years, offering students well-designed apartments equipped with best-in-class facilities. Two of the student accommodation assets are under construction. Besides the newly acquired student accommodation asset, Ascott’s eight other student accommodation assets are as follows:
In December 2021, Ascott’s sponsored hospitality trust Ascott Residence Trust (ART) announced the acquisition of four student accommodation assets in the USA for US$213.0 million (S$291.2 million). The four assets have a total of 1,651 beds, serving more than 100,000 students across five universities in three states. The Link University City is located in Pennsylvania, while Latitude on Hillsborough and Uncommon Wilmington are in North Carolina, and Latitude at Kent is in Ohio. The yield-accretive acquisition is set to increase ART’s pro forma FY 2020 Distribution per Stapled Security by approximately 3.0% and the EBITDA yield is expected to be about 4.9%.
In November 2021, ART acquired Seven07, a freehold 548-bed student accommodation asset for US$83.25 million (S$112.4 million) with an EBITDA yield of about 4.5%. It serves about 56,000 undergraduate and graduate students from the nearby University of Illinois Urbana-Champaign.
In September 2021, ART acquired Wildwood Lubbock, a freehold 1,005-bed student accommodation asset for US$70.0 million (S$93.8 million). It has an expected EBITDA yield of about 5.1%. Wildwood Lubbock serves over 40,000 undergraduate and graduate students at Texas Tech University.
In June 2021, Ascott and ART announced that they will jointly invest and develop a freehold student accommodation in South Carolina. Named ‘Standard at Columbia’, Ascott and ART invested US$109.9 million (S$146.2 million) in the 678-bed asset which will serve over 35,000 students from the nearby University of South Carolina. Construction of the student accommodation started in 3Q 2021 and is expected to complete in 2Q 2023. Upon stabilisation, the EBITDA yield is expected to be approximately 6.2%[8].
In February 2021, ART acquired the freehold 525-bed Paloma West Midtown in Atlanta, Georgia for US$95.0 million (S$126.3 million) with an expected EBITDA yield of about 5%. Paloma West Midtown serves close to 40,000 students at Georgia Institute of Technology.
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[8] The EBITDA yield is a target yield on a stabilised basis
