Singapore-based hospitality real estate investment trust (REIT) Ascott Residence Trust (ART) has announced its third student accommodation investment in the United States.
Ascott Residence Trust will acquire Wildwood Lubbock, a freehold 1,005-bed student accommodation asset in Texas, for US$70 million (S$93.8 million).
Wildwood Lubbock is a cottage-style property which serves over 40,000 undergraduate and graduate students from Texas Tech University (TTU).
Beh Siew Kim, Chief Executive Officer of Ascott Residence Trust Management Limited and Ascott Business Trust Management Pte. Ltd. (the Managers of ART) said: “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. Leases are typically for a year and Wildwood Lubbock will start contributing income immediately. Despite COVID-19, Wildwood Lubbock is 100% leased for the 2021 Academic Year and there is minimal upcoming private student accommodation supply.”
“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. 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%. Following this acquisition, ART’s gearing would remain unchanged at 35.9%. ART continues to be in a strong financial position to seek accretive investments in more longer-stay lodging assets and
create greater value for our Stapled Securityholders,” she added.
Opened in 2017, Wildwood Lubbock is close to TTU, one of the top public research universities with elite college athletics status.
Wildwood Lubbock has 1,005 beds across 294 units, comprising two- to four-bedroom apartments and each room comes with ensuite bathrooms.