CapitaLand’s Ascott Sets Up $150M US Student Housing Venture With Saudi Partner

Singapore-based The Ascott Ltd will expand its US student housing empire through a $150 million development venture with Saudi investor Riyad Capital, starting with an apartment complex near the flagship university of the state of Nebraska.

Ascott, the rental housing division of property giant CapitaLand’s investment arm, will manage Student Accommodation Development Venture (SAVE) and take a 20 percent stake in the platform, with the remaining interest to be held by Riyad Capital, an existing partner from Ascott’s network of lodging property owners.

SAVE’s first investment is a 779-bed student accommodation in the city of Lincoln, the state capital and home of the University of Nebraska, Ascott said Thursday in a release. With the newly acquired property, Ascott has spent $648.9 million to build a portfolio of nine US student housing assets within a year via its funds and its sponsored Ascott Residence Trust.

“Student accommodation assets, with their counter-cyclical qualities, provide income resilience to our investors,” said Kevin Goh, chief executive for lodging at CapitaLand Investment. “Our well-located assets have performed well with operating assets enjoying a strong average occupancy rate of close to 100 percent.”

Former Newspaper Site

Ascott gave no details about the seller, the sale price or the exact location of the under-construction Lincoln project. But Mingtiandi has identified the address as 926 P Street, the former headquarters of the Lincoln Journal Star newspaper, and the seller as developer Trinitas Ventures, which bought and demolished the property last year and is building a two-tiered apartment complex with towers of 13 and six storeys on the site. A CapitaLand representative declined to comment further when reached Thursday.

Scheduled for completion in August 2023, the project is a two-minute walk to downtown Lincoln’s Haymarket retail district and a nine-minute walk to the heart of the University of Nebraska campus and its 25,000 students. The freehold property will offer 779 beds across 321 furnished units in studio and one- to five-bedroom layouts, spanning a net rentable area of 280,000 square feet (26,013 square metres).

The building’s amenities will include a clubhouse, a game room, a swimming pool, a coffee bar, a private study lounge, a yoga room, a fitness centre and tanning beds, as well as 163 parking spots. The asset will be green-certified, seeking at least a Silver rating under the National Green Building Standard, Ascott said.

Indiana-based Trinitas has developed 23 student housing projects across the US, including the 8N Lofts apartments just a few blocks away from Ascott’s latest project.

Hunting for University Beds

Last December, Ascott Residence Trust announced its acquisition of four US student accommodation assets for $213 million, adding to previous purchases in Illinois, Texas, South Carolina (alongside The Ascott Ltd) and Georgia since last February, as the SGX-listed REIT continues to expand beyond its roots in serviced apartments and hotels.

When fully deployed, SAVE will boost Ascott’s funds under management by $375 million, the company said Thursday.

SAVE partner Riyad Capital, the investment arm of Saudi Arabia’s Riyad Bank, launched its international real estate business in 2018 and has acquired about SAR 9 billion ($2.4 billion) worth of properties in US and European cities.

Last October, the Riyadh-based firm marked the first exit for its international real estate platform with the sale of Sequoia Plaza, a 370,000 square foot, three-building office complex in Arlington, Virginia, for more than $200 million to Ohio-based Boyd Watterson Asset Management.