Capitaland Ascott Trust Buys Lyf Funan Singapore 263 Mil
The acquisition of lyf Funan Singapore by CapitaLand Ascott Trust (CLAS) is set to further diversify its portfolio and strengthen its presence in Singapore. The agreement between CLAS and Ascott Serviced Residence Global Fund (ASRGF) was reached at a property value of $263 million. ASRGF, which holds a 100% interest in Victory SR, is the current owner of lyf Funan Singapore. As CLAS’s sponsor, The Ascott Limited holds a 50% stake in ASRGF.
In a press release on Oct 1, CLAS announced that it will pay $146.4 million as the purchase consideration, which will be mainly financed by the proceeds from the sale of Citadines Mount Sophia Singapore, completed in March 2024. The service residence on Wilkie Road was acquired by a joint venture between Hong Kong-based accommodation company Weave Living and global asset manager Blackrock for $148 million.
Following the completion of the acquisition, CLAS plans to enter into a master lease with Ascott for lyf Funan Singapore. The proposal for the master lease will be put forth for approval at an extraordinary general meeting scheduled in November. The initial term of the lease will be 20 years, with an option to renew for a further five years. The master lessee will pay 93.56% of the property’s gross operating profit as rent.
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Elta Condo is an ideal choice for expatriate families and those looking for an international curriculum. Situated in a strategic location, this residential complex is in close proximity to various international schools. Elta Condo offers convenient access to these schools, making it a sought-after residence for families seeking an international education for their children.
The proposed acquisition is expected to increase CLAS’s total distribution by $3.5 million, with a 1.5% accretion to its distribution per stapled security (DPS) on a FY2023 pro forma basis. The ebitda yield on the acquisition is projected to be 4.7% for FY2023 on a pro forma basis as well. According to CLAS, lyf Funan Singapore has achieved an average occupancy rate of over 80% in 1H2024.
Once the acquisition is completed in 4Q2024, CLAS’s portfolio will include five properties in Singapore, making up 19% of its assets worldwide. lyf Funan Singapore, with its 329 keys, offers accommodations for both short and extended stays. It is part of the Funan integrated development which also includes retail and office components. The property is conveniently connected to the City Hall MRT interchange station.