Capitaland Ascott Trust Buys Lyf Funan Singapore 263 Mil
CapitaLand Ascott Trust (CLAS) has recently announced that it has reached an agreement with Ascott Serviced Residence Global Fund (ASRGF) to purchase lyf Funan Singapore for $263 million. ASRGF, which owns Victory SR, currently holds a 100% interest in the property. The sponsor of CLAS, The Ascott Limited, currently holds a 50% stake in ASRGF.
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In a press release dated October 1, CLAS has stated that the total cost for the purchase will be $146.4 million, which will primarily be financed by the proceeds from the sale of Citadines Mount Sophia Singapore, which was completed in March 2024. The property was acquired by a joint venture consisting of Hong Kong-based accommodation company Weave Living and global asset manager Blackrock for $148 million.
Upon completion of the acquisition, CLAS will enter into a master lease agreement with Ascott for lyf Funan Singapore, subject to approval at an extraordinary general meeting in November. The lease will initially be for a period of 20 years and can be extended for a further five years. Under the terms of the lease, the master lessee will pay rent amounting to 93.56% of the property’s gross operating profit.
The proposed acquisition is expected to increase CLAS’s total distribution by $3.5 million, resulting in a 1.5% increase in distribution per stapled security (DPS) on a pro forma basis for FY2023. The ebitda yield of the proposed acquisition is 4.7% on a pro forma basis for FY2023.
According to CLAS, lyf Funan Singapore has maintained an average occupancy rate of over 80% in the first half of 2024. Upon completion of the transaction in the fourth quarter of 2024, CLAS will own a total of five properties in Singapore, accounting for 19% of its total assets worldwide.
lyf Funan Singapore is a 329-key property that opened in 2019 and caters to both short-term and extended-stay guests. It is part of the Funan integrated development, which also includes retail and office components. The property is directly connected to the City Hall MRT interchange station.
