Ascott sells Somerset Orchard serviced residence for S$100m

The Ascott group, wholly-owned by CapitaLand, has sold the 88-unit Somerset Orchard serviced residence for S$100 million.

The sale to OG Private Limited translates to some S$1,530 per square foot.

With a carrying value of S$57 million, CapitaLand is expected to recognise a gross gain of about S$43 million from the deal.

After the sale, Ascott will continue to manage the serviced residence for 15 years, with an option to renew the contract for another 10 years.

Ascott had made the offer to OG to buy the serviced residence under the right of first refusal granted to OG when it bought a four-storey retail podium at Orchard Point – where the serviced residence is located – in 2001.

Somerset Orchard forms part of Ascott’s portfolio of 978 units across nine properties in Singapore.

Chong Kee Hiong, Ascott’s Deputy CEO (Finance & Investment), said: In line with Ascott’s strategy to optimise the use of capital, the proceeds from this divestment will be redeployed to other investment opportunities to enhance our global presence.”

Source : Channel NewsAsia – 8 Sep 2008

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