CapitaLand's Ascott acquires properties in Paris and Hanoi for $210 mil through global fund

SINGAPORE (EDGEPROP) - CapitaLand’s wholly-owned lodging business unit, The Ascott Limited (Ascott) has entered into two agreements to acquire two properties in Paris, France and Hanoi, Vietnam for about $210 million. (See also: CapitaLand buys hyperscale data centre campus in China for RMB3.7 bil)

The properties are being acquired through the Ascott Serviced Residence Global Fund (ASRGF), Ascott’s US$600 million ($807 million) private equity fund with Qatar Investment Authority that was set up in 2015 on a 50:50 joint venture basis.

Post-acquisition, Ascott’s total fund assets under management (FUM) will increase to about $8 billion. Both properties will be acquired on a turnkey basis and are expected to open in 2024.

The Paris property is a freehold asset which will be refurbished to introduce Ascott’s first coliving property in Europe under the lyf brand. Named livelyfhere Gambetta Paris, the 139-unit coliving property is located in a district in the 20th arrondissement.

With this addition, Ascott has a total of 16 lyf properties with more than 3,100 units across 13 cities and nine countries in Asia Pacific and Europe.

The Hanoi property is the 364-unit Somerset Metropolitan West Hanoi, located in Hanoi’s new Central Business District.

“ASRGF and our sponsored hospitality trust, Ascott Residence Trust are key investment platforms to grow our FUM in a capital efficient manner. Our interests are aligned with both our private and public investors, as we put our own capital to work alongside theirs, bringing the strengths of our global reach and operating expertise to deliver the required investment returns,” says Kevin Goh, CapitaLand’s CEO for lodging.

“We are therefore seeing strong growth momentum from fee-related earnings (FRE) generated through the management of our private fund and the listed hospitality trust as well as recurring fees earned from asset management and property management,” he adds.

Mak Hoe Kit, managing director of ASRGF and head, business development at Ascott, says the new acquisitions are in “a strong position for success”. “We will continue to build on our fund’s growth momentum by seeking suitable investment opportunities in long-stay lodging assets in key gateway cities in Asia Pacific and Europe to deliver long-term value for our partners,” he says.

With the acquisition of the two properties, ASRGF will hold a total of eight properties with close to 1,700 units. The fund has five operational properties - Ascott Sudirman Jakarta, Citadines Islington London, La Clef ChampsÉlysées Paris, lyf Funan Singapore, and Quest NewQuay Docklands Melbourne. Citadines Walker North Sydney is slated to open in 2022.

Shares in CapitaLand closed flat at $3.69 on June 18.