Of the S$170.3 million, the fund is acquiring the land for the serviced residence component from CapitaLand Mall Trust (CMT) for S$90.5 million and developing the Singapore flagship of Ascott's millennial-focused lyf brand on the site for an estimated S$80 million.
To be named lyf Funan Singapore, the property will be "designed by millennials for millennials, and is set to offer a new way of living and collaborating as a community in the heart of Singapore's Civic & Cultural District".
The nine-storey co-living property spans about 121,000 square feet in gross floor area. Set to open in 2020, it will provide 279 units with the flexibility to offer up to 412 rooms. lyf Funan Singapore is "an integral part of Funan which also comprises a mall and two office towers offering cutting-edge retail innovations and co-working spaces, for customers to enjoy a complete live-work-play experience within the integrated development".
Lee Chee Koon, Ascott's CEO, said: "We see strategic advantages for lyf's co-living concept at Funan as we expect demand from local and foreign business executives working in the business district and in Funan, as well as new market segments like technopreneurs, startups and those in the entertainment, fashion and creative industries. With the millennial traveller segment already making up a quarter of Ascott's global customer base and poised to further expand, securing our fourth lyf property will enable us to leverage our scale to capture this rapidly growing market, which is set to be the largest spending travel demographic by 2020."
The acquisition cements Ascott's position as the largest and fastest growing serviced residence operator in Singapore with close to 2,000 units in 12 properties. Within a span of two months, Ascott has added about 1,000 units across four properties in Singapore; which includes securing a contract from Low Keng Huat (Singapore) Limited to manage a 166-unit Citadines Balestier Singapore that will open in 2021. This follows Ascott's recent addition of the 240-unit lyf Farrer Park Singapore that was also awarded by Low Keng Huat, as well as a prime 299-unit serviced residence at CapitaLand's landmark integrated development at Raffles Place. Both are also set to open in 2021.
lyf Funan Singapore is Ascott's fifth acquisition under its serviced residence global fund with committed equity of US$600 million (S$809 million). Set up through a 50:50 joint venture with QIA in July 2015, Ascott's largest private equity fund has committed total investment amount of S$533 million to date on lyf Funan Singapore, La Clef Champs-Élysées Paris that will open in 2018, Citadines Islington London and Quest NewQuay Docklands Melbourne that will both open in 2019, as well as Somerset Shinagawa Tokyo which is already operational. Part of these investments will be funded by debt.