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The Ascott Limited announced today (4 August) that it plans to invest $170.3 million to acquire the Funan integrated project’s serviced residence component and develop it into the Singapore flagship for its millennial-focused lyf brand.
CapitaLand’s wholly-owned serviced residence arm intends to spend about $80 million to develop the premises and another $90.5 million to acquire the land for the serviced residence from CapitaLand Mall Trust (CMT).
Slated to open in 2020, the nine-storey lyf Funan Singapore (pictured) is situated in the heart of the Republic’s Civic & Cultural District. With a gross floor area of 121,000 sq ft, the prime co-living space comes with 279 units, with the flexibility to offer up to 412 rooms. It is part of Funan, which also consists of a shopping mall and two office towers.
Moreover, the acquisition strengthens the company’s position as the largest and fastest growing operator of serviced residences here. Within two months, Ascott has added about 1,000 units across four properties in the city-state. These include securing the contracts to manage the 166-unit Citadines Balestier Singapore and the 240-unit lyf Farrer Park Singapore from Low Keng Huat. It added the 299-unit serviced residence at CapitaLand’s landmark integrated project at Raffles Place. All three serviced residences are expected to open by 2021.
“Ascott is expanding at our fastest pace ever in Singapore and is now the country’s biggest serviced residence operator with close to 2,000 units in 12 properties,” said its chief executive Lee Chee Koon.
“This year, we have so far invested about $480 million on acquisitions and added over 20,000 units to Ascott’s portfolio, almost double the number of units secured for the whole of 2016. With this growth trajectory, we are confident of racing ahead of our 2020 target of 80,000 units worldwide.”
Furthermore, the investment in lyf Funan Singapore is being made via its serviced residence global fund, which is equally owned by Ascott and the Qatar Investment Authority (QIA). It represents the fifth acquisition through the US$600 million (S$809 million) fund.
Established in July 2015, Ascott’s largest private equity fund has poured $533 million in investments in other properties. These include La Clef Champs-Élysées Paris that will open in 2018, Quest NewQuay Docklands Melbourne and Citadines Islington London that will both open in 2019, as well as the already operating Somerset Shinagawa Tokyo. Part of these investments will also be financed by loans.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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