Foreign group acquires 17-story student housing tower in Columbia

CapitaLand Ascott Trust has acquired the remaining 10% stake in Standard at Columbia, a student housing complex.

The earnings before interest, taxes, depreciation and amortisation (EBITDA) yield on total development cost is expected to be approximately 7%, according to a news release. This is higher than the 6.2% EBITDA yield that was projected in 2021 on the basis that the property has achieved stable performance. The acquisition is funded by proceeds from CLAS’ earlier divestments, the release stated.

CLAS acquired Standard at Columbia in phases over three years. In June 2021, CLAS and its sponsor, The Ascott Limited, jointly invested to own 90% of the property on a 50:50 basis and to develop the property, according to the release. CLAS subsequently acquired Ascott’s 45% stake in November 2022.

Financial terms of the deal were not disclosed.

The 678-bed Standard at Columbia serves over 35,000 undergraduate and graduate students from the University of South Carolina, the release stated. It turned operational in August 2023 with an occupancy rate of over 90%.

The complex opened in July 2023. National real estate development and investment firm CRG handled the project along with Landmark Properties, the national’s largest student housing developer, design-builder Clayco and architecture firm Lamar Johnson Collaborative.

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Standard at Columbia is one of the best performing student accommodation properties serving USC, commanding one of the highest rents per bed, the release stated. For the upcoming academic year 2024-25, the pre-leasing occupancy rate has reached 99% as at end May, with rental growth of about 4% compared to AY 2023-24.

“The acquisition of Standard at Columbia is in line with CLAS’ strategy to marry stability and growth to generate long-term returns to Stapled Securityholders,” Serena Teo, CEO of CapitaLand Ascott Trust Management Limited and CapitaLand Ascott Business Trust Management, said in the release. “Recycling capital from our divestment proceeds into this longer-stay asset with strong operating performance will further boost our returns.

“With an average length of stay of about one year, student accommodation properties enhance CLAS’ stable income stream and strengthen our portfolio’s resilience against macroeconomic uncertainties. It diversifies our portfolio which also comprises hospitality assets such as serviced residences or hotels that allow us to capture travel demand for growth income.”

CapitaLand Group is one of Asia’s largest diversified real estate groups, according to its website. Headquartered in Singapore, CapitaLand’s portfolio focuses on real estate investment management and real estate development, and spans across more than 260 cities in over 40 countries.

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