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CapitaLand buys 16 multifamily properties in US for US$835m

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The Marquessa Villas are surrounded by award-winning schools as well as retail and dining outlets.

CAPITALAND has acquired 16 multifamily properties in the US for US$835 million (S$1.14 billion), the real estate developer announced on Tuesday morning.

The portfolio comprises 3,787 apartment units located in suburban communities of the metropolitan areas of Seattle, Portland, Greater Los Angeles and Denver. CapitaLand said it marks the group's foray into the country's multifamily asset class to ride on the growing demand for long-term rental housing.

The price per unit of the portfolio is US$220,000, which CapitaLand said is consistent with market transactions. The properties are operating at more than 90 per cent average occupancy, with average length of stay of about two years.

"This latest acquisition in the US, the world's biggest economy, would expand CapitaLand's global investment portfolio, diversify our business outside of our two core markets of Singapore and China and allow us to grow new businesses," said CapitaLand president and group CEO Lee Chee Koon.

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"The multifamily sector in the US is broad, scalable and a growth sector marked with long-term secular trends. Widely regarded as one of the most resilient and liquid institutional real estate classes in the US, this multifamily portfolio offers attractive risk-adjusted returns for CapitaLand."

The transaction is expected to be completed in fouth quarter of 2018.

CapitaLand first entered the US market in Aug 2015, and has acquired five properties there through its subsidiary Ascott. Ascott also owns a majority stake in Synergy Global Housing, which offers apartments for corporate lease.

The latest multifamily portfolio acquisition increases CapitaLand's investment in the US to more than US$1.5 billion and its presence in the market to more than 6,500 units.