Singapore: Ascott Residence Trust has entered into an agreement to sell Ascott Raffles Place Singapore for S$353.3 million to an unrelated third party.
Ascott says the sale price of S$353.3 million is 64.3 per cent above the property’s latest valuation of S$215 million as at 31 December 20181. The price was agreed at after a marketing exercise conducted by an independent property consultant.
Ascott Reit is expected to realise an estimated net gain of S$134 million. Net proceeds from the sale “could be channelled into new investment opportunities that will offer better growth prospects for Ascott Reit”. The transaction is expected to be completed in May 2019.
Beh Siew Kim, Ascott Residence Trust Management Limited’s CEO, said: “The divestment is in line with Ascott Reit’s strategy to proactively reconstitute our portfolio to optimise returns for unitholders. 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 such as lyf one-north Singapore to enhance Ascott Reit’s portfolio. As Ascott Raffles Place Singapore accounts for three per cent of Ascott Reit’s gross profit for the nine months ended 30 September 2018, its sale 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 Singapore, Citadines Mount Sophia Singapore and Somerset Liang Court Singapore. lyf one-north Singapore is expected to open in 2021.
Ascott Reit acquired Ascott Raffles Place Singapore from The Ascott Limited for S$220 million in 2012. The property has a prime location in Singapore’s Central Business District.
