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(14/02/24)
 CapitaLand Investment Limited (CLI) has
established a new lodging private fund, CapitaLand Ascott
Residence Asia Fund II (CLARA II).

With a target equity size of US$600 million
(SG$800 million, based on an exchange rate of US$1 to SG$1.333.),
CLARA II will invest in serviced residences and coliving
properties in gateway cities in key developed Asia Pacific
markets.

CLARA II is CLI’s second private fund that focuses
on serviced residence and coliving assets, following the US$600
million (S$800 million) Ascott Serviced Residence Global Fund
(ASRGF).

CLI will hold a 20% sponsor stake in CLARA II in
line with its asset-light strategy to grow funds under management
while keeping strong alignment with investors and partners. The
remaining 80% will be held by third-party institutional investors.

Social Kitchen at lyf Bugis Singapore

“Combining CLI’s investment management
capabilities and Ascott’s expertise in operating lodging
properties worldwide under our award-winning brands, we are
well-positioned to support the growth of our private funds,” said
Kevin Goh, Chief Executive Officer for CLI Lodging and Ascott. “We
are in a strong financial position to seize good investment
opportunities and inject quality assets into our private funds.
Tapping on travellers’ preference for trusted brands, CLARA II
will leverage Ascott’s global operational expertise, and sales and
marketing network. This enables us to enhance the value of the
assets and deliver sustainable returns to investors. Investors
will further benefit from the strong demand for lodging as
international travel continues its upward trajectory. Besides Asia
Pacific, we see the potential to establish more lodging private
funds in other regions such as Europe.”

CLARA II has secured its first close with equity
commitment by global institutional investors from Europe and Asia,
and the fund will acquire two seed assets.

The assets are a 50% stake in the 308-unit lyf
Bugis Singapore – with the remaining 50% of lyf Bugis Singapore
held under CLI’s CapitaLand Wellness Fund – and an 100% stake in
the 200-unit lyf Shibuya Tokyo in Japan from Ascott.

The two freehold properties are both set to be
green-certified, with lyf Bugis Singapore scheduled to be unveiled
in mid-2024 while lyf Shibuya Tokyo will open in 4Q 2024.

“Investors’ interest in serviced residences and
coliving properties have increased as these assets have proven to
be resilient even during the Covid19 pandemic. These properties
generate stable income from long-stay guests and have the
flexibility to take in guests on short stay to maximise revenue.
With trends such as increased global mobility, coliving becoming
mainstream and travellers spending more time overseas, the sector
is strategically positioned to offer attractive returns. CLARA II
will target markets that have strong economic fundamentals and
transparent regulations. We see good investment and value-add
opportunities in these key developed Asia Pacific markets,” said
Mak Hoe Kit, Managing Director, Lodging Private Equity Funds, CLI.
“Through our first fund, ASRGF, we have demonstrated how we create
value for our investors. Over 90% of ASRGF’s portfolio were
sourced off-market or originated in-house, a testament to our
strong global investment teams. After a successful rebrand and
asset enhancement initiative, the divestment of our first property
under ASRGF surpassed expected returns. ASRGF’s latest property,
lyf Ginza Tokyo, opened in November 2023 and has since exceeded
its average target rent. We remain committed as a trusted partner
to deliver quality returns for our investors.”

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