CapitaLand Ascott Trust plans to acquire lyf Funan Singapore for $263 million
Sign up now: Get ST's newsletters delivered to your inbox
Located in Funan, lyf Funan Singapore is a 329-room hotel development under Ascott’s lyf hospitality concept.
PHOTO: THE ASCOTT
Follow topic:
SINGAPORE - CapitaLand Ascott Trust (Clas) is proposing to acquire the 329-room lyf Funan Singapore from Ascott Serviced Residence Global Fund (ASRGF) for $263 million in a move that is expected to raise its quarterly dividends to investors, Clas said on Oct 1.
ASRGF is a private equity fund co-owned by Clas’ sponsor The Ascott Limited and the Qatar Investment Authority.
Located in Funan Mall, lyf Funan Singapore is the largest co-living property in South-east Asia, according to CapitaLand’s website.
Co-living is an emerging concept involving accommodation with communal facilities, such as shared kitchens and lounge areas, and social programmes that cultivate a sense of community among tenants.
lyf is a hospitality concept developed by Ascott for younger travellers.
Clas is expected to fork out funds totalling $146.4 million for lyf Funan Singapore.
The total consideration of $263 million includes an element of debt, which Clas is taking over.
The move will be largely funded by proceeds from its sale of Citadines Mount Sophia Singapore, which was completed in March for $148 million.
Following the transaction, Clas’ managers expect that the total payout to investors will increase by $3.5 million.
This means each investor could receive 1.5 per cent more in dividends compared with the 2023 financial year.
Clas’ gearing is expected to remain under 40 per cent after the proposed acquisition.
Its managers said the acquisition of lyf Funan Singapore is in line with a strategy of periodically reviewing and rebalancing the assets within its portfolio.
If approved at an extraordinary general meeting in November, lyf Funan Singapore will be Clas’ third acquisition in 2024.
In January, it bought Teriha Ocean Stage, a rental housing property in Fukuoka.
In June, it acquired the remaining 10 per cent stake in Standard at Columbia, a student accommodation in South Carolina in the US.
In contrast, Clas has sold six properties for $340 million so far in 2024, enabling it to lock in capital gains of $46.2 million, it said.
Acquiring lyf Funan Singapore would bring Clas’ total number of properties in Singapore to five and increase the proportion of Singapore assets in its total portfolio to 19 per cent versus 16 per cent.
Clas is geographically diversified, with each of its key markets currently comprising no more than 20 per cent of its total assets.
Clas’ share price ended the day flat at 97.5 cents on Oct 1.
