Ascott establishes new student lodging venture with Riyad Capital
CapitaLand Investment’s wholly owned lodging business unit, The Ascott, has established a joint venture with Riyad Capital, the investment arm of Saudi Arabia’s Riyad Bank, to develop student accommodation assets in the US.
Ascott and Riyad Capital have collectively put up US$150 million ($204.8 million) in committed equity for Student Accommodation Development Venture (SAVE), which will be managed by Ascott. Ascott will hold a 20% stake in SAVE, while Riyad Capital will hold the balance 80%.
According to a press release by Ascott on Feb 3, the venture will boost Ascott’s funds under management by US$375 million when fully deployed.
The venture’s first investment is a 779-bed Class-A freehold student accommodation development asset in Lincoln, Nebraska, US. The asset will serve over 25,000 undergraduate and graduate students from the nearby University of Nebraska-Lincoln.
Currently under construction, the student accommodation asset is slated for completion by August 2023.
With the new acquisition, Ascott says it has invested about US$648.9 million to build a diversified portfolio of nine student accommodation assets in a year via its funds and its sponsored trust,
Ascott Residence Trust.
“Our well-located assets have performed well with operating assets enjoying a strong average occupancy rate of close to 100%. We remain confident in the segment and look to invest through platforms such as SAVE to create value for our capital partners by leveraging Ascott’s expertise and network to identify under-supplied student accommodation markets that are close to good universities,” says Kevin Goh, CapitaLand Investment’s CEO for lodging. —