CapitaLand Ascott Trust - Maybank Research 2024-06-04: Boosting Stable Income Base

• CapitaLand Ascott Trust announced the acquisition of the remaining 10%, it doesn’t already own in the freehold student housing property, using prior divestment proceeds.

Owning fully Standard at Columbia – a long stay asset

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• The property has a pre-leasing occupancy of 99% as at end-May for the upcoming academic year with a 4% y-o-y rent growth. The purchase is in line with CapitaLand Ascott Trust (SGX:HMN)'s strategy of recycling capital into longer stay assets to boost income resilience.

Shoring up long stay asset in the property mix

• The 678-bed asset serves over 35K students from University of South Carolina, the largest university in the state. The asset commands one of the highest rents per bed.
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• CapitaLand Ascott Trust subsequently acquired the sponsor’s 45% stake in Nov 2022.

The asset turned operational in Aug 2023 with occupancy > 90% and rent growth of 5.5% y-o-y. The 4% disclosed rent growth for the upcoming academic year seems to suggest a slowdown and is in line with the commentary in the May 2024 National Student Housing Report. However, management's commentary indicates that pre-leasing of several properties in the portfolio is pacing ahead of their respective markets, which is comforting.

Marrying stability with growth

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Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2024-06-04 SGinvestors.io

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