Netherlands’ Bouwinvest Commits $75M to CapitaLand APAC Lodging Fund

Amsterdam-based Bouwinvest Real Estate Investors has invested $75 million in a CapitaLand Investment fund targetting serviced residence and co-living opportunities across Asia Pacific in a bet on a rebound in Asia’s lodging market.

The Dutch real estate investment manager said on Monday that it has committed the cash to CapitaLand Ascott Residence Asia Fund II (CLARA II), a $600-million value-add lodging vehicle, through its Bouwinvest Asia Pacific Mandate, after CapitaLand had announced the fund last month.

CapitaLand has already begun deploying CLARA II with the company having said when it unveiled a first closing for the fund in February that it had acquired a half-stake in a Singapore hotel and a Tokyo apartment block from the Singapore group’s Ascott serviced residence division. Both properties are being repositioned and rebranded under Ascott’s Lyf co-living brand.

“We believe CLI is best positioned to capitalise on the recovery of the Asian hospitality sector through their long and successful track record in the lodging space,” said Jorrit Sennema, portfolio manager for Asia-Pacific at Bouwinvest. He added that, “With this hybrid serviced residences strategy we intend to pivot between short and long-stay hospitality demand in the Asian gateway markets”.

Adding to Lyf

Bouwinvest, which in recent years has backed rental housing ventures in Belgium and France, is investing in the CapitaLand fund as the group’s Ascott division propagates its Lyf co-living brand globally.

In January CapitaLand announced that it had signed deals to add the Lyf banner to eight properties in destinations including Bali, Penang, Sydney and Frankfurt, with the brand now displayed on properties in 21 cities with over 5,500 units, including both operating and pipeline rooms.

Part of that pipeline is the former Hotel G, which Ascott, together with CapitaLand Wellness Fund, a Southeast Asia-focused private vehicle which Capitaland set up in October, had acquired from Gaw Capital Partners in January. In a 50:50 joint venture the partners paid S$240 million ($180 million) for that property.

Also part of the CLARA II portfolio is Lyf Shibuya Tokyo, a 200-room property which the fund acquired from Ascott for an unspecified amount. That building near Shibuya station was among the eight new Lyf locations CapitaLand announced in January.

“CLI’s investment management capabilities, combined with Ascott’s expertise in operating lodging properties worldwide under our award-winning brands, enables us to enhance the value of our lodging assets and deliver sustainable returns to investors,” said Mak Hoe Kit, managing director for lodging private equity funds at CapitaLand Investment said. “With trends such as increased global mobility, co-living becoming mainstream and travellers spending more time overseas, the serviced residence and co-living sector is strategically positioned to offer attractive returns.”

In announcing the first closing for CLARA II last month, CapitaLand said it had raised cash from both European and Asian institutional investors, with the group planning to retain a 20 percent stake in the vehicle.

CLARA II succeeds Ascott Serviced Residence Global Fund (ASRGF) which Ascott Ltd set up in a 50:50 joint venture with the Qatar Investment Authority in 2015.

“We are proud to team up with a strong partner like CLI,” said Robert Koot, director of Asia Pacific investments with Bouwinvest said in a statement. “They have shown to create future proof assets with strong branding that perform well.”

Bed Time for Bouwinvest

Managing €15.1 billion ($16.4 billion) in assets on behalf of its Dutch pension fund clients, Bouwinvest is backing CapitaLand’s lodging fund less than a year after it formed an A$1.5 billion (then $980 million) build-to-rent joint venture with fellow Dutch investor, APG Asset Management, and Scape Australia, the country’s largest provider of student accommodation.

At the time that they established that venture in May of last year, the partners set a target of developing 10,000 apartments across Australian capital cities by 2030.

In December a Belgian joint venture backed by Bouwinvest closed on a deal to purchase an apartment complex in the city of Woluwe-Saint-Lambert with plans to incorporate a co-living element in that complex.

In 2020 the Netherlands institution tied up with Ivanhoé Cambridge and Greystar to launch a €1 billion ($1.1 billion) purpose-built student accommodation and young professional accommodation venture in the Greater Paris Region. That JV acquired a western Paris co-living facility in 2021.

A JLL report earlier this month showed the “living” sector was among the most preferred sectors by institutional investors globally, after trades in the sector accounted for more than a quarter of global real estate transactions in 2023. In a separate study, the property consultancy projected investments in rental residential across APAC could reach $20 billion annually by the end of the decade.