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The 1,005-bed student accommodation property acquired by Ascott Residence Trust for about S$93.8million serves students at Texas Tech University.
Ascott Residence Trust (ART) will acquire Wildwood Lubbock – a 1,005-bed student accommodation property in Texas, USA, for US$70 million (S$93.8 million) – marking the company’s third student accommodation investment in the last seven months.
“The acquisition of our third student accommodation asset is in line with ART’s strategy to acquire assets with longer length of stay and diversify our portfolio from traditional hospitality assets, further increasing ART’s resilience and stable income,” said Beh Siew Kim, CEO of ART’s manager.
The accretive acquisition is expected to increase the trust’s pro forma FY 2020 distribution per stapled security by about 1.5%, while the EBITDA yield will stand at 5.1%.
Opened in 2017, Wildwood Lubbock is a freehold cottage-style facility serving more than 40,000 undergraduate and graduate students from Texas Tech University (TTU).
The sixth biggest university in Texas, TTU saw its student population consistently grow at a compound annual growth rate of 2.5% in the past decade. In fact, overall enrolment for the 2020 academic year increased 4% year-on-year despite the pandemic.
With this, Wildwood Lubbock is 100% leased for the 2021 academic year.
“With Wildwood Lubbock, ART will expand its longer-stay portfolio to about 11%, keeping us on track to have student accommodation and rental housing properties constitute about 15-20% of our total property value in the medium term,” said Beh.
“Since the expansion of ART’s investment mandate to include student accommodation assets in January 2021, ART has committed to invest a total of about S$379 million on three prime student accommodation assets in USA and three rental housing properties in Sapporo, Japan at an average EBITDA yield of about 5%.”
She added that ART’s gearing will remain unchanged at 35.% following this latest acquisition.
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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.