Ascott Residence Trust (ART) is acquiring four student accommodation assets in the US for USD213 million.
The assets are Link University City in Pennsylvania, Latitude on Hillsborough and Uncommon Wilmington in North Carolina, and Latitude at Kent in Ohio.
The four assets feature a total of 1,651 beds, serving more than 100,000 students across five universities in three states.
The yield-accretive acquisition is set to increase ART’s pro forma FY 2020 distribution per stapled security by approximately 3.0% while EBITDA yield is expected to be about 4.9%.
The acquisition will be 92% funded by debt and 8% funded by the remaining proceeds from ART’s private placement launched in September 2021.
The hostels were completed between 2019 and 2020, and are about 94% occupied.
The acquisition is expected to be completed in phases from end-December 2021.
“With the new acquisition, ART has doubled the number of student accommodation assets in our portfolio”, said Beh Siew Kim, CEO of the trust’s manager.
“Our student accommodation assets and rental housing properties now make up about 16% of our total portfolio value, surpassing our initial target of 15%”.
“We remain on track to grow this longer-stay portfolio to 20% in the medium term, building a sizable stable income base”, she added.
ART was last done on the Singapore Exchange at SGD1.00, which presently implies a distribution yield of 4.09% according to data on the Singapore REITs table.