Ascott Residence Trust makes first US PBSA play

George Sell George Sell Uploaded 28 January 2021

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US: Singapore-listed Ascott Residence Trust has made its first foray into the US student housing market with the acquisition of an Atlanta property for $95 million.

The transaction, expected to be completed this quarter, see ART take ownership of Signature West Midtown with 215,895 square feet (20,057 square metres) of net rentable area.

The purpose-built student accommodation, close to the Georgia Institute of Technology, was completed in 2019 and has 525 beds across 183 units.

The seller is a joint venture of student housing owner-operator Preiss and global asset manager Investcorp. The two partners had purchased the property last February from Atlanta’s Cartel Properties, which had completed the project in 2019.

“Student accommodation is one of the most resilient real estate asset classes and has maintained high occupancy during the COVID-19 situation in the USA,” said Bob Tan, chairman of Ascott Residence Trust Management Ltd and Ascott Business Trust Management, the managers of the trust. “ART will continue to seek opportunities for quality student accommodation assets in key markets with strong student population growth.”

In a presentation about the new acquisition, the REIT’s managers noted the sector’s resilience in the face of the COVID-19 pandemic.

Prior to taking on this latest investment, the SGX-listed trust, which includes properties managed under the Ascott groups serviced apartment brands including The Ascott, Somerset, Citadines and the recently launched Lyf co-living entry, had focused on acquiring and operating serviced residences, rental housing properties, and other hospitality assets.

“ART’s properties that cater predominantly to the long-stay customer segment, our geographically diversified presence, and mix of stable and growth income streams have helped to cushion the impact of COVID-19 on ART’s financial performance,” said Tan. “About two-thirds of ART’s gross profit was from master leases and management contracts with minimum guaranteed income which provide us with more stability.”

 

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