In line with its asset-light strategy to grow its funds under management (FUM), CLI will have a 20% stake in CLARA II. The remaining 80% will be held by third-party institutional investors.
CLARA II will leverage the global operating expertise of CLI’s lodging business, The Ascott Limited, to manage its portfolio of resilient and green-certified lodging assets.
The new fund has already secured its first close with equity commitment by global institutional investors from Europe and Asia, and the fund will acquire two seed assets, a 50% stake in the 308-unit lyf Bugis Singapore and a 100% stake in the 200-unit lyf Shibuya Tokyo. Both properties are freehold and are well-positioned to capture the strong demand from business and leisure travellers. They are also set to be green-certified. lyf Bugis Singapore will be unveiled in mid-2024 while lyf Shibuya Tokyo will open in 4Q2024.
“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. We are in a strong financial position to seize good investment opportunities and inject quality assets into our private funds,” says Kevin Goh, CEO for CLI Lodging and Ascott.
See also: Nikko AM plans launch of Amova MSCI AC Asia ex Japan ex China Index ETF
“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,” he adds.
“Investors’ interest in serviced residences and coliving properties have increased as these assets have proven to be resilient even during the Covid-19 pandemic. These properties generate stable income from long-stay guests and have the flexibility to take in guests on short stay to maximise revenue,” says Mak Hoe Kit, managing director, lodging private equity funds at CLI.
“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 APAC markets,” he adds.
Shares in CLI closed flat at $2.85 on Feb 13.
