Ascott, Riyad Form $150M Student Housing JV

Property in Nebraska. Image courtesy of The Ascott Limited

The Ascott Limited (Ascott), a wholly owned lodging business unit of CapitaLand Investment Limited (CLI), has forged a joint venture totaling $150 million to develop U.S. student housing properties.

The JV, Student Accommodation Development Venture, will be comprised of a 20 percent Ascott stake, with the remainder held by Riyad Capital, one of the largest institutional capital partners in the Middle East. Fully deployed, the venture will increase Ascott’s funds under management to $375 million.

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The JV’s first investment is in a Class A freehold student accommodation development currently under construction in Lincoln, Neb. To feature 779 beds across 321 fully-furnished units, the property will serve undergraduate and graduate students from nearby University of Nebraska Lincoln, the state’s flagship university.

The property will feature a fitness center with tanning beds, and is one block from the University of Nebraska campus, and a nine-minute walk from the heart of the university. The lively Haymarket District, dotted with shops, cafes, bars and other lifestyle options, is situated within a two-minute walk from the property.

Diverse portfolio

Slated to be available for the 2023-24 academic year, the property is scheduled to be complete by August 2023. The new acquisition brings to approximately $648.9 million the investments Ascott has made in one year in its quality, diversified portfolio of nine student using assets. Those investments have been made via its funds and its sponsored trust, Ascott Residence Trust (ART).

The student housing properties are situated mainly in U.S. Sun Belt states, Ivy League and “Power 5”: Athletics Conference markets and near their respective key educational institutions. Seven of the student housing properties are in operation.

With more than 5,100 beds, the student housing properties in the portfolio will serve more than 295,000 students from respected universities boasting large student populations, steady enrollment growth and strong athletics programs.

In a prepared statement, a CLI official noted the counter-cyclical qualities of student housing properties translate into income resilience for company investors.

He also noted the company’s properties have strong average occupancy rates of near 100 percent and are ideally located near well-regarded universities.