CapitaLand's wholly owned serviced residence business unit, The Ascott, is investing $170.3 million, through its serviced residence global fund with the Qatar Investment Authority, in the serviced residence component of the Funan integrated development.
Of the $170.3 million, $90.5 million will be used to acquire the land for the component from CapitaLand Mall Trust (CMT), and an estimated $80 million to develop the Singapore flagship of Ascott's millennial-focused lyf brand on the site.
To be called lyf Funan Singapore, it will be designed by millennials for millennials, and offer a new way of living and collaborating as a community in the heart of the Civic and Cultural District. The nine-storey co-living property boasts about 121,000 sq ft in gross floor area.
Slated to open in 2020, it will provide 279 units, with the flexibility to offer up to 412 rooms.
lyf Funan Singapore will be an integral part of Funan, which will also include a mall and two office towers offering innovative retail outlets and co-working spaces that allow customers to enjoy a live-work-play experience within the development.
Ascott said the acquisition cements its position as the largest, fastest-growing serviced residence operator here, with nearly 2,000 units at 12 properties.
Within two months, it has added about 1,000 units across four properties in Singapore - including securing a contract from Low Keng Huat (Singapore) to manage the 166-unit Citadines Balestier Singapore, set to open in 2021.
Ascott recently added the 240-unit lyf Farrer Park Singapore, also awarded by Low Keng Huat, and a 299-unit project at CapitaLand's landmark integrated development in Raffles Place.
Both serviced residences are slated to open in 2021 as well.
On the latest acquisition, Ascott chief Lee Chee Koon said: "We see strategic advantages for lyf's co-living concept at Funan as we expect demand from local and foreign executives working in the business district and Funan, as well as new market segments like technopreneurs and those in the creative industries.
"With the millennial traveller segment already making up a quarter of Ascott's global customer base and poised to expand further, securing our fourth lyf property will enable us to leverage our scale to capture this market, set to be the largest spending travel demographic by 2020."
lyf Funan Singapore is Ascott's fifth acquisition under its serviced residence global fund, with a committed equity of US$600 million (S$814 million).