Singapore: Ascott Reit has acquired a greenfield site for S$62.4 million for its first development project.
It will build the first co-living property in Singapore’s research and innovation business hub, one-north. Located at Nepal Hill, the property will be managed by The Ascott Limited under the lyf brand. To be named lyf one-north Singapore, the property will offer 324 units. It is scheduled to achieve Temporary Occupation Permit by 2020 and open in 2021.
The 60-year leasehold Singapore: Ascott Reit has acquired a greenfield site for S$62.4 million for its first development project.site was put up by the JTC Corporation (JTC) for sale in a two-envelope concept and price tender. Ascott Reit’s concept proposal features the creative use of communal spaces, a holistic design centred on building a vibrant and collaborative community, as well as comprehensive programmes which promote social bonding, wellness, personal development and business networking.
The 200-hectare one-north estate has attracted over S$7 billion worth of investments in critical growth sectors such as the biomedical, info-communications and media industries. The location is also a talent development hub, home to world-renowned business schools and corporate universities.
Bob Tan, Ascott Residence Trust Management Limited’s chairman, said: “Ascott Reit is acquiring a prime site in Singapore to build a property on our own for the first time. Compared to acquiring completed properties, this investment not only allows us to have an early entry at a lower cost, enjoy development profits, but we can also expect higher yield in the long term. This development only accounts for about three per cent of Ascott Reit’s total asset value, which is within the 10 per cent regulatory limit on property development for REITs. Singapore is a safe environment for construction, and by designing and building the property ourselves with customised specifications and having it managed by our sponsor, Ascott, we can be assured of building quality and strong operating performance. After the acquisition, Ascott Reit’s gearing will be 37.2 per cent, which is below the 45 per cent gearing threshold, thereby offering adequate debt headroom for the funding of the acquisition.”
He added: “Ascott Reit’s four properties in Singapore have been performing well at an average occupancy rate of over 80 per cent. The strong government support and private sector investment in one-north give us further confidence to invest in the site. This is an important move to build Ascott Reit’s pipeline of quality yield-accretive assets in Singapore, a mature hospitality market with stable performance, especially since it is becoming harder to find immediately accretive assets in the country. The acquisition would broaden Ascott Reit’s earnings base, further diversify and strengthen our global portfolio to grow returns to unitholders. We will continue to seek accretive opportunities in key gateway cities to enhance Ascott Reit’s global portfolio while maintaining a balance of growth and stable income to deliver sustainable returns to unitholders.”
