Ascott Reit Acquires Prime Greenfield Site For S$62.4M To Build Co-Living Property
Ascott Residence Trust (Ascott Reit) has acquired a prime greenfield site for S$62.4 million for its maiden development project. It will build the first coliving property in Singapore’s research and innovation business hub, one-north. Located at Nepal Hill amidst 400 companies, 800 startups and 50,000 professionals, the property is expected to be managed by its sponsor, The Ascott Limited (Ascott) under the coliving brand, lyf, targeted at the rising millennial segment. To be named lyf one-north Singapore, the property will offer 324 units. It is slated to achieve Temporary Occupation Permit by 2020 and open in 2021.
The 60-year leasehold site was put up by the JTC Corporation (JTC) for sale in a two-envelope concept and price tender. Ascott Reit’s concept proposal features the creative use of communal spaces, a holistic design centred on building a vibrant and collaborative community, as well as comprehensive programmes which promote social bonding, wellness, personal development and business networking.
The 200-hectare one-north estate has attracted over S$7 billion worth of investments in critical growth sectors such as the biomedical, info-communications and media industries. The location is also a talent development hub, home to world-renowned business schools and corporate universities.
Mr Bob Tan, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “Ascott Reit is acquiring a prime site in Singapore to build a property on our own for the first time. Compared to acquiring completed properties, this investment not only allows us to have an early entry at a lower cost, enjoy development profits, but we can also expect higher yield in the long term. This development only accounts for about 3% of Ascott Reit’s total asset value, which is within the 10% regulatory limit on property development for REITs. Singapore is a safe environment for construction, and by designing and building the property ourselves with customised specifications and having it managed by our sponsor, Ascott, we can be assured of building quality and strong operating performance. After the acquisition, Ascott Reit’s gearing will be 37.2%, which is below the 45% gearing threshold, thereby offering adequate debt headroom for the funding of the acquisition.”
Mr Tan added: “Ascott Reit’s four properties in Singapore have been performing well at an average occupancy rate of over 80%. The strong government support and private sector investment in one-north give us further confidence to invest in the site. This is an important move to build Ascott Reit’s pipeline of quality yield-accretive assets in Singapore, a mature hospitality market with stable performance, especially since it is becoming harder to find immediately accretive assets in the country. The acquisition would broaden Ascott Reit’s earnings base, further diversify and strengthen our global portfolio to grow returns to Unitholders. We will continue to seek accretive opportunities in key gateway cities to enhance Ascott Reit’s global portfolio while maintaining a balance of growth and stable income to deliver sustainable returns to Unitholders.”
lyf one-north Singapore is located right next to the one-north MRT station and a 30-minute ride to the Central Business District. The property enjoys easy access to key districts within the city via the Ayer Rajah Expressway and public transportation network. Commercial buildings as well as dining and retail options are available in the vicinity. Guests can look forward to fully-digital customer experience and communal amenities such as a lap pool, social kitchen, fitness area, barbeque garden, outdoor seating area, residents’ lounge, laundromat, thematic function rooms, and indoor events hall. Spanning a gross floor area of over 73,447 square feet (6,823.5 square metres) 2, lyf one-north Singapore will offer a mix of studio and loft units.
With this acquisition, Ascott Reit will own five properties in prime locations in the central and western regions of Singapore, offering approximately 1,000 apartment units. Ascott Reit’s other four properties in Singapore are Ascott Orchard Singapore, Ascott Raffles Place Singapore, Citadines Mount Sophia Singapore and Somerset Liang Court Singapore.