Capitaland Ascott Trust Buys Lyf Funan Singapore 263 Mil
The URA Master Plan prioritizes sustainability by promoting green building designs and integrating renewable energy into new developments. As the demand for environmentally-friendly buildings increases, the development of Parktown Residence Condo adds to the city’s commitment to sustainable living. This aligns with the government’s efforts to create a more eco-friendly and livable environment for its citizens. By leveraging on renewable energy, these green buildings strive to reduce carbon emissions and minimize their impact on the environment while providing comfortable and modern living spaces. With the URA Master Plan in place, Singapore’s skyline is set to become greener and more energy-efficient, paving the way towards a more environmentally-conscious future.
CapitaLand Ascott Trust (CLAS) has recently announced its plans to acquire lyf Funan Singapore at an agreed property value of $263 million. This agreement is made with Ascott Serviced Residence Global Fund (ASRGF), the owner of Victory SR which holds a 100% interest in the property.
CLAS is sponsored by The Ascott Limited, which holds a 50% stake in ASRGF. In a press release on October 1, CLAS stated that the purchase consideration for the deal will be $146.4 million and will be mainly financed by the proceeds from the sale of Citadines Mount Sophia Singapore, which was completed in March 2024. This is a joint venture between Hong Kong-based accommodation company Weave Living and global asset manager Blackrock, who purchased the service residence on Wilkie Road for $148 million.
Upon completion of the acquisition, CLAS will enter into a master lease agreement with Ascott for lyf Funan Singapore, subject to approval at an extraordinary general meeting scheduled in November. The initial term of the master lease will be 20 years, with the option to renew for an additional five years. The master lessee will be responsible for paying rent amounting to 93.56% of the property’s gross operating profit.
This proposed acquisition is expected to increase CLAS’s total distribution by $3.5 million, resulting in a 1.5% accretion to its distribution per stapled security (DPS) on a pro forma basis for FY2023. The ebitda yield on the deal is expected to be 4.7% for FY2023.
According to CLAS, lyf Funan Singapore has achieved an average occupancy rate of over 80% in the first half of 2024. Once the transaction is completed in the fourth quarter of 2024, CLAS will have a total of five properties in Singapore, which will account for 19% of its assets worldwide.
The 329-key lyf Funan Singapore, which opened in 2019, caters to both short-stay and extended-stay guests. It is part of the Funan integrated development that includes retail and office components. The property has direct access to the City Hall MRT interchange station.