Ascott-Qatari Fund to Acquire Paris, Hanoi Residential Projects for $156M

Singapore’s The Ascott Ltd has agreed to buy a Paris co-living property and a Hanoi serviced apartment project on behalf of the firm’s private equity fund with the Qatar Investment Authority for S$210 million ($156 million).

The acquisition of the two properties through the Ascott Serviced Residence Global Fund (ASRGF) will boost Ascott’s fund assets under management to S$8 billion, the lodging unit of property giant CapitaLand said in a Monday release. Both properties will be acquired on a turnkey basis and are expected to open in 2024.

The 139-unit LiveLyfHere Gambetta Paris in the 20th arrondissement will be Ascott’s first co-living development in Europe under the Lyf brand after refurbishment of the property is completed. The 364-unit Somerset Metropolitan West Hanoi, meanwhile, will serve expats seeking accommodation in an emerging business hub in the Vietnamese capital’s Thanh Xuan area.

“Our acquisition of these two prime properties in France and Vietnam is in line with Ascott’s ambition to expand our global lodging business,” said Kevin Goh, CapitaLand’s chief executive for lodging and Ascott’s chief executive. “With a presence in over 190 cities across over 30 countries, the scale of our operations worldwide gives Ascott favourable access to proprietary deal flows.”

Swelling Portfolio

The acquisition of the two assets will bring ASRGF’s portfolio to eight properties with close to 1,700 units. Five of the projects are already operational, including the Ascott Sudirman Jakarta, Citadines Islington London, La Clef Champs-Elysees Paris, Lyf Funan Singapore and Quest NewQuay Docklands Melbourne. Citadines Walker North Sydney, added to the fund in 2019, is scheduled to open in 2022.

Now valued at $600 million, ASRGF was set up in July 2015 as a 50:50 joint venture with the Qatar Investment Authority, the emirate’s sovereign wealth fund, and is Ascott’s biggest private equity vehicle.

Mak Hoe Kit, managing director of ASRGF and head of business development for Ascott, said the fund’s first divestment outperformed expectations without specifying the divested property.

With the addition of LiveLyfHere Gambetta Paris, Ascott will have over 3,500 units in 34 properties across 13 cities in France, including 17 properties in Paris. In Vietnam, Somerset Metropolitan West Hanoi will increase Ascott’s portfolio to over 7,600 units across 31 properties in 10 cities.

Strategic Growth

Under a restructuring announced in March, Ascott parent CapitaLand is seeking to boost investment returns by listing its capital-efficient, fee-generating investment management unit and privatising its capital-intensive, slower-moving development business.

This new approach is transforming the Temasek Holdings-controlled conglomerate from a property developer with an investment management arm to an investment manager with a closely held development component.

Ascott and its 190-city portfolio of lodgings will come under publicly listed CapitaLand Investment Management once the restructuring is complete. With assets under management of S$115 billion, CLIM is expected to be the largest real estate investment manager in Asia.

The approach continues a focus on investment services that has made Southeast Asia’s largest real estate developer into one of Asia Pacific’s biggest real estate fund managers. Only in 2020 was the group overtaken by fellow Singaporean firm ARA Asset Management as the biggest fund manager in Asia Pacific real estate by assets under management, according to a report released in May.

Despite being outstripped by ARA last year, CapitaLand managed to break into the ranks of the world’s 10 largest real estate fund managers in 2020, as its real estate assets under management worldwide exceeded $100 billion.

CapitaLand group CEO Lee Chee Koon, who will lead CLIM, said in March that the restructuring would sharpen focus and position the business as an asset-light and capital-efficient enterprise.

“We have made good progress to pivot ourselves to the new economy sectors, expanding our global footprint and growing our fee-income business,” he said. “We are now taking the next step to create a leading global real estate investment manager with dominance in Asia, especially through our track record in the public REITs space.”