Ascott sets student housing venture with Riyad Capital

Artist's rendition of a student accommodation asset to be developed in Nebraska, U.S., under The Ascott Ltd.'s venture with Riyad Capital, which was entered into in February 2022. Credit: The Ascott.Artist's rendition of a student accommodation asset to be developed in Nebraska, U.S., under The Ascott Ltd.'s venture with Riyad Capital, which was entered into in February 2022. Credit: The Ascott.

CapitaLand Investments‘ wholly owned lodging unit The Ascott Ltd. has entered a US$150 million, or around S$204.8 million, venture to develop student accommodation assets with Riyad Capital in the U.S., the company said in a statement filed to SGX Thursday. 

The venture, to be called Student Accommodation Development Venture (SAVE), will be managed by Ascott, which will hold 20 percent, while Riyad Capital will hold the remainder, the filing said. 

The first investment will be a 779-bed student accommodation development asset in Lincoln, Nebraska, located near the University of Nebraska-Lincoln (UNL), Ascott said. Construction of the asset is expected to be completed by August 2023, the filing said.

The latest acquisition will bring Ascott’s investments across nine student accommodation assets to US$648.9 million in a year, the filing said. 

“Student accommodation assets, with their counter-cyclical qualities provide income resilience to our investors. Our well-located assets have performed well with operating assets enjoying a strong average occupancy rate of close to 100 percent,” Kevin Goh, CapitaLand Investment’s CEO for Lodging, said in the statement.

“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,” Goh added. 

SAVE is expected to boost Ascott’s funds under management by US$375 million, or around S$512 million, once the venture is fully deployed, the filing said. 

Saudi Arabia-based Riyad Capital has more than US$24 billion in assets under management; it is involved in asset management, investment banking and alternative investments, and holds a real estate portfolio with assets across cities in Saudi Arabia, the U.S. and Europe, the filing said.