The site comprises Liang Court mall, midscale hotel Novotel Singapore Clarke Quay and serviced residence Somerset Liang Court Singapore.

This comes as CDL Hospitality Trusts (CDLHT) has proposed to sell its entire stake in Novotel Singapore Clarke Quay to the 50:50 CDL-CapitaLand joint venture (JV) entities and CDL.

At the same time, Ascott Reit will sell part of its interest in Somerset Liang Court to CDL. In a separate filing on Wednesday, Ascott Reit said it signed a put and call option agreement with CDL to sell 15,170 square metres (sq m) of the site’s gross floor area (GFA) for S$163.3 million to CDL, and retain 13,034 sq m of GFA.

Subject to approval from the authorities, the Liang Court site will be turned into an integrated development with total GFA of 100,263 sq m.

The proposed project will comprise two residential towers offering some 700 residential units, a commercial component, an “upper midscale” hotel with 460 to 475 rooms, and a 192-unit serviced residence with a hotel licence.

The residential and commercial components will be owned by the 50:50 CDL-CapitaLand JV entities, while the serviced residence will be owned by Ascott Reit, which is a wholly-owned subsidiary of CapitaLand.

CDLHT will own the hotel under a forward purchase agreement with CDL. CDLHT will make the forward purchase at the lower of either the fixed price of S$475 million for the property or 110 per cent of the actual development costs incurred in developing the new hotel.

The proposed mixed-use project will open in phases from 2024.

The new hotel will be operated under the Moxy brand by Marriott International when it is completed around 2025, while the new serviced residence will keep its Somerset branding when it opens in the second half of 2024.

Ascott Reit said in its filing that it will use its net proceeds from selling part of its interest in Somerset Liang Court to develop the new serviced residence, from the retained 13,034 sqm of GFA. The land’s lease tenure will be refreshed from 57 years to 99 years. Upon completion, the estimated project development expenditure of the new serviced residence will be about S$300 million. Ascott Reit noted that the existing Somerset Liang Court is an ageing serviced residence and has been facing competition from newer hotels.

Along with the redevelopment, the consortium will also rejuvenate the river promenade next to the property, in line with the Urban Redevelopment Authority’s Draft Master Plan 2019 to enhance the area’s vibrancy.

The promenade’s facelift is expected to generate social activities around the proposed integrated development, increase foot fall and improve pedestrian accessibility along the Singapore River.

Within the Singapore River precinct, CDL owns Central Mall, an office-and-retail development along Magazine Road, while CapitaLand has a stake in the Clarke Quay mall – housed within five blocks of shophouses – through CapitaLand Mall Trust and a stake in Park Hotel Clarke Quay through Ascott Reit.

The Liang Court site marks another collaboration between CDL and CapitaLand, after their successful joint bid last year to develop a commercial and residential site in Sengkang Central atop Buangkok MRT station.

CDLHT is managed by subsidiaries of Millennium & Copthorne Hotels plc, which is the hotel arm of the CDL group.

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The proposed combination will result in the combined entity becoming the eighth largest hospitality trust globally, with an asset value of S$7.6 billion, the two trusts announced in a joint news release.

It will also become the seventh largest trust listed on the Singapore Exchange by asset value.

The transaction will bring together Ascott Reit’s global portfolio comprising predominately of serviced residences and A-HTRUST’s 14 hotels in the Asia-Pacific region, creating a portfolio of 88 properties with more than 16,000 units in 15 countries across Asia Pacific, Europe and the United States of America.

It will also further diversify Ascott Reit’s portfolio into new cities: Brisbane and Seoul.

ACCESS TO LARGER CAPITAL BASE

“The combined entity will have a higher proportion of stable income derived from master leases; well balanced by growth income derived from management contracts,” said Ascott Residence Trust Management Limited’s Chairman Bob Tan.

“With access to a larger capital base and a higher debt headroom of about S$1 billion, we will have greater financial flexibility to seek more accretive acquisitions and value enhancements.”

He added: “The combined entity can then be strategically positioned to potentially enjoy a positive re-rating of the unit price and gain a wider investor base, which would be beneficial to all our unitholders.”

The total consideration for the combination is S$1,235.4 million, comprising S$61.8 million in cash and 902.8 million new Ascott Reit-BT stapled units.

Through a trust scheme of arrangement, Ascott Reit will acquire all the A-HTRUST stapled units for a consideration of S$1.0868 per unit, comprising S$0.0543 in cash and 0.7942 Ascott Reit-BT stapled units issued at a price of S$1.30.

Ascott Reit will establish Ascott Hospitality Business Trust (Ascott BT), and all the units in Ascott Reit will be stapled with units in Ascott BT to form a stapled trust.

Pursuant to the trust scheme of arrangement, all the units in A-HTRUST will be unstapled, Ascott Reit will acquire all the unstapled units in A-HTRUST REIT and Ascott BT will acquire all the unstapled units in AHTRUST BT, and A-HTRUST will then be delisted.

LARGER EXPOSURE TO ASIA PACIFIC

The combination will enable larger exposure to the Asia-Pacific region, said CEO of Ascott Residence Trust Management Beh Siew Kim in an interview with CNA938 radio.

“Through this combination, we actually increase our Asia Pacific exposure by 11 per cent, and 71 per cent of our portfolio will be in Asia Pacific,” she said.

“Asia Pacific is also experiencing a boom in tourism, underpinned by (an) expanding middle class,” she added. “So an enlarged portfolio will actually position us to capture the fastest-growing hospitality market in Asia Pacific driven by business and leisure demands.”

The new entity will also be “well-positioned” to benefit from a strong sponser in CapitaLand and its lodging unit The Ascott, said Mr Chia Kim Huat, lead independent director of the A-HTRUST Managers.

“The combined entity will be CapitaLand’s sole listed hospitality trust platform with an enlarged portfolio and mandate to invest globally,” he said.

The proposed transaction is subject to the approval of Ascott Reit unitholders and A-HTRUST stapled unitholders at their respective extraordinary general meetings and scheme meetings expected to be held by this year.

A-HTRUST comprises Ascendas Hospitality Real Estate Investment Trust (A-HTRUST REIT) and Ascendas Hospitality Business Trust (A-HTRUST BT), and its portfolio is valued at about S$1.8 billion as at Mar 31, 2019.

It is managed by Ascendas Hospitality Fund Management (the manager of A-HTRUST REIT) and Ascendas Hospitality Trust Management (the trustee-manager of A-HTRUST BT), both wholly-owned subsidiaries of CapitaLand.

Ascott Reit is Singapore’s first and largest hospitality real estate investment trust and has an asset value of S$5.7 billion as at Mar 31, 2019.

It is managed by Ascott Residence Trust Management, an indirect wholly-owned subsidiary of CapitaLand.

CapitaLand owns about 45 per cent and 28 per cent of outstanding units in Ascott Reit and A-HTRUST respectively.

After the completion of the proposed combination, CapitaLand expects to have about a 40.2 per cent stake in the combined entity.

The real estate developer announced in February that its full-year net profit jumped 12.3 per cent, coming in at S$1.76 billion last year. This marks its highest net profit since 2008.

Source: CNA – 3 Jul 2019

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The sale price is 64.3 per cent above the property’s latest valuation of S$215 million as at Dec 31, 2018, Ascott Reit said in a stock exchange filing on Wednesday (Jan 9).

It said that the buyer is an unrelated third party, but did not reveal the name.

Ascott Reit acquired the serviced residence from The Ascott Limited for S$220 million in 2012. The sale will help it realise an estimated net gain of S$134 million, which will be channelled into new investment opportunities, Ascott Reit said.

“The sale will give us the financial flexibility to recycle capital and invest in higher-yielding properties. We may also use the sale proceeds to pay down debt which will then increase our debt headroom for potential acquisitions of quality assets or to develop our own properties,” said Ms Beh Siew Kim, Ascott Residence Trust Management Limited’s CEO.
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Once Southeast Asia’s tallest building, the 20-storey Ascott Raffles Place houses 146 units across 15,696 sqm of gross floor area. The property, which opened in 2008, has a leasehold of 999 years.

The transaction is expected to be completed in May.

Ascott Raffles Place accounted for 3 per cent of Ascott Reit’s gross profit for the nine months ended September 2018. The sale of the property is not expected to have a material impact on Ascott Reit’s financial performance.

Ascott Reit’s other operational properties in Singapore are Ascott Orchard, Citadines Mount Sophia and Somerset Liang Court. lyf one-north is expected to open in 2021.

Source: Channel NewsAsia – 9 Jan 2019

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The 60-year leasehold land, acquired from JTC Corporation, will be used to build a development for co-living, under Ascott’s co-living brand lyf. It will offer an estimated 324 units across two residential blocks and is slated to open by 2021.

This acquisition accounts for an estimated 3% of Ascott Reit’s total asset value, and brings Ascott’s lyf brand in Singapore to three – lyf at Funan is scheduled to open in 2020, while lyf at Farrer Park is slated to open in 2021.

Ascott hopes to target millennials and young working professionals working in the one-north cluster, a 200-hectare development zoned out by the Singapore government to house research facilities in fields such as media, engineering, ICT and the sciences.

This is the first time Ascott Reit is building a property, as opposed to acquiring completed properties.

Mr Bob Tan, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “Ascott Reit is acquiring a prime site in Singapore to build a property on our own for the first time. Compared to acquiring completed properties, this investment not only allows us to have an early entry at a lower cost, enjoy development profits, but we can also expect higher yield in the long term. This development only accounts for about 3% of Ascott Reit’s total asset value, which is within the 10% regulatory limit on property development for REITs. Singapore is a safe environment for construction, and by designing and building the property ourselves with customised specifications and having it managed by our sponsor, Ascott, we can be assured of building quality and strong operating performance. After the acquisition, Ascott Reit’s gearing will be 37.2%, which is below the 45% gearing threshold, thereby offering adequate debt headroom for the funding of the acquisition.”

Lyf at one-north will be designed by architecture firm WOHA.

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If year-ago results were restated to account for a rights issue, through which 481.7 million units were issued on April 11 last year, DPU would have slipped 16 per cent from 2.18 cents.

Unitholders’ distribution fell 15 per cent to $39.8 million. Gross revenue for Q2 rose 6 per cent to $130.5 million, while gross profit rose 7 per cent to $63.1 million.

Ascott Reit said Q2 DPU would have increased by 13 per cent if a one-off item for the same period last year was excluded. This was a realised exchange gain of $11.9 million from the repayment of foreign currency bank loans with the proceeds from a rights issue and completion of divestments of 18 rental housing properties in Tokyo.

The Reit’s higher revenue and gross profit resulted from its acquisitions of assets including Ascott Orchard Singapore, Citadines City Centre Frankfurt and Citadines Michel Hamburg with master leases providing income stability, as well as DoubleTree by Hilton Hotel New York – Times Square South which continues to see strong demand, it said.

For the first half of the year ended June 30, DPU declined 5 per cent to 3.19 cents. Revenue increased by 4 per cent to $243.3 million, and gross profit also rose by 5 per cent to $111.8 million.

Unitholders’ distribution for H1 2018 fell 4 per cent to $68.9 million on the back of contributions from a realised exchange gain of $1.6 million airising from divestment proceeds and repayment of foreign currency bank loans with the proceeds.

“Ascott Reit’s asset size has grown sixfold and shareholder returns have increased over 200 per cent since its listing in 2006,” said chairman Bob Tan.

Ascott will continue to seek accretive acquisitions to sustain growth and maintain a balanced portfolio for stable income through master leases and management contracts. Mr Tan added: “We will also actively manage our portfolio by identifying opportunities to divest assets and redeploy the capital to higher-yielding properties.”

Although the global economy is forecast the International Monetary Fund to grow 3.9 per cent in 2018, tightening financial conditions and trade tensions are threatening global growth, Ascott said.

Chief executive officer Beh Siew Kim said Ascott will continue to monitor and manage interest rates and foreign currency exposure through appropriate capital financing and hedging. About 84 per cent of its total borrowings are on fixed interest rates to hedge against potential interest rate hikes.

“We have also ensured our debt maturity is well spread over the long term with the bulk of debt maturing in 2020 and beyond,” Ms Beh added.

Ascott Reit has 73 properties in 37 cities across 14 countries.

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The acquisition – the REIT’s first in US – of the 411-room Element New York Times Square West hotel will yield an EBITDA of 6.2 per cent, and it is expected to increase Ascott REIT’s distribution income in the 2014 financial year by US$800,000 (S$1.08 million), it said.

Mr Lim Jit Poh, Chairman of Ascott REIT, said the acquisition will provide a “strong foothold” to expand the company’s presence in US.

After the acquisition, the property will continue to be operated by LG-39 Management LLC and its affiliates under the Element brand through a franchise by Starwood Hotels & Resorts Worldwide, Inc, according to Mr Ronald Tay, CEO of Ascott REIT.

Ascott REIT has recently acquired seven property assets – three serviced residences and four rental housing properties – in Australia and Japan for S$298.3 million last month.

Source : Channel NewsAsia – 2 Jul 2015

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It will acquire the 380-unit Citadines on Bourke Melbourne from Ascott for A$158.5 million (S$167.6 million). It will also buy the remaining 40 per cent interest in Citadines Shinjuku Tokyo and Citadines Karasuma-Gojo Kyoto for about 3 billion yen (S$33.7 million) and 1.4 billion yen (S$16 million), respectively, from Ascott, the REIT said in its press release.

Additionally, it will acquire four rental housing properties in Osaka for 7.3 billion yen (S$81 million).

“The seven prime assets with 1,152 apartment units will broaden Ascott REIT’s earning base and increase our scale to 11,368 apartment units in 95 properties across 39 cities, further diversifying our portfolio across key cities globally,” said Mr Lim Jit Poh, Chairman of Ascott REIT.

“Ascott REIT’s asset size will also enlarge from S$4.1 billion to S$4.4 billion, bringing us closer to our target asset size of S$6 billion by 2017.”

Mr Ronald Tay, CEO of Ascott REIT, said: “We have been very bullish on Japan as a hospitality market for investment, so total asset base in Japan now would be exceeding 16 per cent. We will continue to focus on equity acquisitions in Japan.”

“Again, we like Australia for being a stable and developed market so we will continue to look for acquisition opportunities in Australia as well,” he added.

Ascott REIT currently owns 90 properties in 37 cities across the Asia Pacific and Europe.

Source : Channel NewsAsia – 25 Jun 2015

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Ascott Reit will acquire the 207-unit Somerset Ampang Kuala Lumpur from The Ascott Ltd for RM175 million (S$67.4 million), it said in a statement on Monday. It will also acquire the 249-unit Citadines Zhuankou Wuhan and the 251-unit Citadines Gaoxin Xi’an for 252 million yuan (S$51.4 million) and 270 million yuan (S$55.1 million), respectively, from Ascott Serviced Residence (China) Fund, in which Ascott holds a 36.1 per cent stake.

The three serviced residences will continue to be managed by Ascott.

Ascott Reit’s international portfolio comprises 83 properties across 12 countries in the Asia-Pacific and Europe.

Source : Channel NewsAsia – 7 Jul 2014

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This will raise FY2012 distribution per unit by 2.9 per cent – from 8.76 cents to 9.01 cents.

Ascott Reit said the three serviced residences in China are located in Shanghai, Shenyang and Suzhou and they will continue to be managed by Ascott.

It will also be buying a portfolio of 11 rental properties (959 apartment units) across six cities in Japan, namely Fukuoka, Sapporo, Kyoto, Hiroshima, Saga and Sendai.

Besides adding 1,576 apartment units to its current 7,060 apartment units, the acquisitions will increase the trust’s asset size by 11 per cent to S$3.1 billion.

The trust added that its share of assets from Asia will increase from 59 per cent to 63 per cent of its total asset value.

The number of cities where Ascott Reit has its presence will also be increased from 25 to 32 cities.

It is also actively on the lookout for acquisition targets.

Chief executive officer of Ascott Residence Trust Management, Ronald Tay said: “Hopefully we will be able to make some acquisitions in the second half of the year. We continue to like Asia very much. So the key markets like Singapore China, and potentially India as well as a new market. For Europe, we will continue to look at Europe on an opportunistic basis. Markets that we like are in Europe include London, Paris and key gateway cities in Germany. “

The acquisitions will be funded partly by the S$150 million raised from Ascott Reit’s equity placement earlier this year and the balance will be funded by debts.

Source : Channel NewsAsia – 2 May 2013

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It will redevelop the property, Somerset Grand Cairnhill, into an integrated development comprising serviced residences (with hotel licence) and high-end residential properties.

CapitaLand is expected to sell the redeveloped serviced residences (with hotel licence) back to Ascott REIT for S$405 million in 2017.

Sales of the 200 to 250 high-end residential units, which should comprise 60 per cent of the development, are slated for launch next year.

Ascott, the serviced residences arm of CapitaLand, said it will be using part of gains from two divestments for investment opportunities in Europe.

These include divesting serviced residences The Ascott Raffles Place and the entire interest in Ascott Guangzhou to Ascott REIT for S$220 million and S$63.6 million, respectively.

Chong Kee Hiong, CEO of The Ascott Ltd, said: “I think selling to the REIT is in line with the price that the tender results have shown. Of course, we own 49 per cent of Ascott REIT — all things being the same, our preference obviously is to sell to Ascott REIT than to sell to third party.”

CapitaLand said the new Cairnhill serviced residences component is neither profitable nor loss-making, and analysts predict the upside will mainly come from the selling price of future residential units.

Source : Channel NewsAsia – 9 Jul 2012

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