(09 Mar 2022, 11:16 +07)
Ascott Residence Trust (ART) has unveiled plans
to invest about JPY 10.4 billion (S$125 million) to acquire four
rental housing properties and its first student accommodation
property in Japan.
Three of the rental housing properties are located
in central Osaka with the other in Fukuoka, one of the
fastest growing cities in the country.
The student accommodation
property in Osaka serves the main campus of Kindai University
(KU), which is just a two-minute walk away. KU has over 30,000
The yield-accretive acquisitions are set to
increase ART’s pro forma FY 2021 Distribution per Stapled Security
by approximately 1.7%. The average NOI yield is expected to be
Eslead College Gate Kindaimae
The five properties will be acquired on a turnkey
basis from two different sellers on a willing buyer and willing
The transactions are expected to be completed
between 1Q 2022 and 2Q 2023.
Ms Beh Siew Kim, Chief Executive Officer of Ascott
Residence Trust Management Limited and Ascott Business Trust
Management (the managers of ART) said, “ART continues to
build up our longer-stay portfolio to boost income stability.
Post-acquisition, on a pro forma basis, ART’s longer-stay
properties are expected to contribute 17% to gross profit, up from
15% in FY 2021. As the five properties will be acquired on a
turnkey basis, there is no development risk. Minimal down payment
is required and the majority of the payment will be made upon
completion of the transactions. We remain committed to delivering
sustainable, long-term value to our Stapled Security holders.”
With these latest acquisitions, ART has invested
about S$905 million in longer-stay properties since January 2021.
The acquisitions of the five freehold rental housing and student
accommodation properties will increase ART’s longer-stay
properties to 17% of its total portfolio value.
ART is on track to
meet its medium-term target of 25-30% for its longer-stay
properties, strengthening the resilience of ART’s portfolio.
“The addition of four more rental housing
properties will boost the overall resilience of our portfolio.
Leases for the four properties are about two years in length,
providing better visibility and stability in future cashflows.
ART’s existing rental housing properties in Japan have achieved a
strong average occupancy rate of over 95% in 2021 despite
three rental housing properties in Sapporo have
performed well since our acquisition in June 2021. We expect the
four new rental housing properties to perform strongly too. Our
first student accommodation property in Japan adds to our quality
portfolio of eight student accommodation properties in the USA. It
is located close to a highly reputable university with a large
student population, and there is limited competing supply. The
property in Japan is under a 15-year master lease with the largest
student accommodation operator in the country, generating stable
income for ART,” added Ms Beh.
Ascott Residence Trust Buys More Student Accommodation in USA,
Ascott to Develop Student Accommodation in South Carolina, USA
Ascott Residence Trust to Buy UIUC Student Accommodation Building
in Illinois, USA.