Ascott has, through its subsidiaries, entered
into conditional sale and purchase agreements to divest 28 of its
serviced residence properties to Ascott Residence Trust (Ascott
Reit) for a sale consideration of S$969.6 million.
consists of 26 serviced residences in Europe and one property each
in Singapore and Vietnam. Ascott is expected to realise a net gain
of approximately S$52.1 million from the divestments.
At the same time, Ascott will purchase Ascott Reit’s entire interest in Ascott Beijing, a premium serviced
residence property, for S$214 million and will enhance and
reposition the property for future strata-title sale.
Mr Lim Chin Beng, Chairman of The Ascott Limited
said, “This is an important milestone for Ascott as it
continues to extend its leadership as the world's largest
international serviced residence owner-operator. We will
leverage on this opportunity to reconstitute Ascott’s portfolio
and inject quality stabilised assets into Ascott Reit, which is
in line with our capital recycling strategy. It is also consistent with CapitaLand’s business model of holding
stabilised income-producing assets in REITs. At the same time,
these transactions will almost double Ascott Reit’s asset size to
S$2.85 billion, transforming the Reit into a bigger and stronger
platform to complement Ascott’s global growth strategy. Ascott
will not only benefit from the divestment gains but will
continue to earn fees from operating the properties and
managing the Reit. Since Ascott will maintain its 47.7% share
in Ascott Reit, it will also continue to earn distribution income
from the Reit.”
The divestment of the
European properties will transform Ascott Reit from a Pan-Asian
into an international REIT and catapult it from being the 12th
largest to the 6th largest S-REIT by asset size. Ascott Reit’s
right of first refusal will expand to include properties in Europe and will thus increase its pipeline of properties.
Ascott Reit currently has the right of first refusal to acquire
Ascott’s operating serviced residences in the Pan-Asian region
before Ascott divests them to a third party.
Mr Lim Ming
Yan, Chief Executive Officer, The Ascott Limited said, “These
proposed transactions are an important part of the transformation
of Ascott. Besides strengthening and transforming Ascott Reit,
the sale consideration of about S$970 million will also provide
Ascott the financial capacity to capture new opportunities in
Asia and Europe. In addition to our key markets like China, Singapore, Vietnam and India, we are also seeing attractive
investment prospects in Paris, London and key cities in
Mr Lim Ming Yan added, “After the divestment, Ascott
will continue to operate the 28 properties which is consistent
with our plan to scale up to
40,000 apartment units by 2015.
Having significant scale will enable us to further enhance our
award-winning hospitality through upgrading our people,
hospitality management systems and properties.”
properties with 3,347 apartment units which Ascott is divesting to
Ascott Reit are located in Paris and the regional cities of France; London, the United Kingdom; Brussels, Belgium; Berlin
and Munich, Germany; and Barcelona, Spain; while the Asian
properties are Citadines Singapore Mount Sophia and Somerset
Hoa Binh in Hanoi.
Currently, Ascott has a total of 47
properties with over 5,200 apartment units in Europe, nine
properties with over 900 units in Singapore, eight properties
with over 1,300 units in Vietnam and 33 properties with over 6,300
units in China.
and divestments are inter-conditional upon the other being
completed such that if any of the acquisition or the divestments
is not completed, neither transaction will take place.
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