CapitaLand buys 16 US properties for $1.14b

The 3,787 apartment units have an average occupancy rate of over 90%.

CapitaLand forays into the multifamily asset class in the US as it bought 16 freehold properties in the United States for $1.14b (US$835m), an announcement revealed.

In total, the portfolio comprises 3,787 apartment units across suburban communities of the metropolitan areas of Seattle, Portland, Greater Los Angeles and Denver. The properties offer facilities such as swimming pools, fitness centres, dog parks, playgrounds and clubhouses, all in an expansive garden-style compound. 

According to the firm, the Class B properties have an average occupancy of over 90% and an average length of stay of about two years. They enjoy accessibility through highways or commuter rail systems and are also accessible to amenities such as supermarkets, malls, schools, and nature reserves.

“They see strong demand from a diverse mix of middle-income and skilled professionals working in the surrounding employment hubs,” CapitaLand said.

The regions where the properties are located are home to government agencies, as well as to multinational corporations such as Boeing, Microsoft, Starbucks, Amazon, and Nike.

“The multifamily sector in the US is broad, scalable and a growth sector marked with long-term secular trends,” CapitaLand Group CEO and president Lee Chee Koon said. “Widely regarded as one of the most resilient and liquid institutional real estate asset classes in the US, this multifamily portfolio offers attractive risk-adjusted returns for CapitaLand.”

The price per unit of the portfolio is US$220,000, which is consistent with market transactions. 

Lee noted that they are also looking to build long-term rental housing platforms in other fast-growing markets such as China.