Ascott Reit buys land for $62.4 mil to build co-living property

Ascott Residence Trust (Ascott Reit) has purchased a prime site in Singapore’s research and innovation business hub, one-north, for $62.4 million.

The 60-year leasehold land, acquired from JTC Corporation, will be used to build a development for co-living, under Ascott’s co-living brand lyf. It will offer an estimated 324 units across two residential blocks and is slated to open by 2021.

This acquisition accounts for an estimated 3% of Ascott Reit’s total asset value, and brings Ascott’s lyf brand in Singapore to three – lyf at Funan is scheduled to open in 2020, while lyf at Farrer Park is slated to open in 2021.

Ascott hopes to target millennials and young working professionals working in the one-north cluster, a 200-hectare development zoned out by the Singapore government to house research facilities in fields such as media, engineering, ICT and the sciences.

This is the first time Ascott Reit is building a property, as opposed to acquiring completed properties.

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.”

Lyf at one-north will be designed by architecture firm WOHA.

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