SINGAPORE - CapitaLand's wholly owned serviced residence business unit, The Ascott Ltd, is investing S$170.3 million, through its serviced residence global fund with Qatar Investment Authority (QIA), in the serviced residence component of the Funan integrated development.
Of the S$170.3 million, the fund is acquiring the land for the serviced residence component from CapitaLand Mall Trust (CMT) for S$90.5 million and developing the Singapore flagship of Ascott's millennial-focused lyf brand on the site for an estimated S$80 million
To be named lyf Funan Singapore, the prime property will be designed by millennials for millennials, and is set to offer a new way of living and collaborating as a community in the heart of Singapore's Civic & Cultural District. The nine-storey co-living property spans about 121,000 sq ft in gross floor area.
Slated to open in 2020, it will have 279 units with the flexibility to offer up to 412 rooms.
lyf Funan Singapore will be an integral part of Funan, which also comprises a mall and two office towers offering innovative retail outlets and co-working spaces for customers to enjoy a live-work-play experience within the integrated development.
Ascott said the acquisition cements its position as the largest and fastest growing serviced residence operator in Singapore with close to 2,000 units in 12 properties.
Within a span of two months, Ascott has added about 1,000 units across four properties in Singapore; which includes securing a contract from Low Keng Huat (Singapore) Limited to manage a 166-unit Citadines Balestier Singapore that will open in 2021. This follows Ascott's recent addition of the 240-unit lyf Farrer Park Singapore that was also awarded by Low Keng Huat, as well as a prime 299-unit project at CapitaLand's landmark integrated development at Raffles Place. Both serviced residences are also slated to open in 2021.
On Ascott's acquisition of lyf Funan Singapore, Ascott CEO Lee Chee Koon said: "We see strategic advantages for lyf's co-living concept at Funan as we expect demand from local and foreign business executives working in the business district and in Funan, as well as new market segments like technopreneurs, startups and those in the entertainment, fashion and creative industries.
"With the millennial traveller segment already making up a quarter of Ascott's global customer base and poised to further expand, securing our fourth lyf property will enable us to leverage our scale to capture this rapidly growing market, which is 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 committed equity of US$600 million (S$809 million). Set up through a 50:50 joint venture with QIA in July 2015, Ascott's largest private equity fund has committed a total investment amount of S$533 million to date to lyf Funan Singapore, La Clef Champs-Elysees Paris that will open in 2018, Citadines Islington London and Quest NewQuay Docklands Melbourne that will both open in 2019, as well as Somerset Shinagawa Tokyo which is already operational.
Part of these investments will be funded by debt.
Ascott has four lyf properties - lyf Wu Tong Island Shenzhen and lyf DDA Dalian in China which are scheduled to open in 2018, followed by lyf Funan Singapore in 2020 and lyf Farrer Park Singapore in 2021.
Besides Singapore and China, Ascott said it is actively looking at other potential markets, including Australia, France, Germany, Indonesia, Japan, Malaysia, Thailand and the United Kingdom, as it works towards its target of achieving 10,000 lyf-branded units worldwide by 2020.