CapitaLand’s Ascott enters deal to buy two properties via private equity fund with Qatar Investment Authority

Top of the CapitaLand building in Singapore’s central business district (CBD); taken September 2018.Top of the CapitaLand building in Singapore’s central business district (CBD); taken September 2018.

The Ascott Ltd., CapitaLand’s wholly owned lodging unit, has entered a deal to acquire two properties — one in Paris and one in Hanoi — for around S$210 million via Ascott’s private equity fund with Qatar Investment Authority, the property company said in a statement Monday.

The two properties were acquired via the Ascott Serviced Residence Global Fund, or ASRGF, which was set up as a US$600 million 50:50 joint venture with Qatar’s sovereign wealth fund in 2015. The deal will boost Ascott’s total fund assets under management (FUM) to around S$8 billion, the statement said.

“Ascott Serviced Residence Global Fund and our sponsored hospitality trust, Ascott Residence Trust, are key investment platforms to grow our FUM in a capital efficient manner,” Kevin Goh, CapitaLand’s CEO for lodging, said in the statement. ASRGF has acquired eight properties.

He said the company was seeing strong growth from fee-related earnings from managing the private fund and the listed hospitality trust, in addition to fees from asset and property management.

“We are looking to work with like-minded capital partners to set up new funds to expand in resilient asset classes, such as coliving and student accommodation, to accelerate our FUM and fee-related earnings growth. Concurrently, we continue to secure more third-party
management contracts and franchises to increase Ascott’s property fee income,” Goh added.

The Paris property will be renovated into Ascott’s first co-living property in Europe under its lyf brand, the statement said, adding it will have 139 units. That will bring Ascott’s total to 16 lyf properties with more than 3,100 units across 13 cities, it said.

The Hanoi property is the 364-unit Somerset Metropolitan West Hanoi in the city’s new central business district.

Both properties are being acquired on a turnkey basis — or fully ready-for-operation basis — with the opening expected in 2024, Ascott said.