CDL Hospitality Trusts to buy Studio M Hotel

CDL Hospitality Trusts has said it is planning to buy Studio M Hotel in Singapore for S$154 million.

This works out to about S$428,000 per room.

CDL said the acquisition is expected to be immediately yield-enhancing and would also broaden the earnings base of its portfolio.

It added that the hotel has achieved impressive occupancy of 88.9 per cent since starting full operations in June last year.

The purchase price was arrived on a willing-buyer and willing-seller basis, taking into account two independent valuations which puts the hotel at a value of around S$154 million.

CDL said the purchase will be initially fully funded through debt financing via its Hospitality REIT.

This could be partly or wholly refinanced with the proceeds from issuing notes through the REIT’s S$1 billion Multi-Currency Medium Term Note Programme or other means.

Looking ahead, CDL said with its strategic location, Studio M Hotel is set to benefit from an increase in demand for hotel rooms in Singapore.

The transaction is subject to approval from its unitholders at an extraordinary general meeting.

Source : Channel NewsAsia – 2 Mar 2011

Join The Discussion

Compare listings