Ascott all set to push Asia exposure to 63% of asset value

Property proposal worth S$287.4m is under way.

According to DBS, Ascott Residence Trust (ART) is proposing to acquire 3 serviced residences properties in China and 11 Rental Housing Properties in Japan for S$287.4m from its sponsor, Ascott Group.

The properties will be acquired at a slight discount to valuers’ valuation and the purchase price implies an initial EBITDA yield of 5.4%.

Here's more from DBS:

The proposed acquisitions will increase its exposure in Asia to 63% of asset value.

The China properties will form close to 60% of the total deal size and will strengthen its presence in Shanghai (Citadines Biyun Shanghai) while expand its footprint into new cities of Shenyang (Somerset Heping Shenyang) and Suzhou (Citadines Xinghai Suzhou).

The manager expects its portfolio in China to deliver a RevPAU growth of c5% in FY13. The Japan rental housing properties on the other hand, offers stability as 5 out of the 11 properties are tied to master-leases with tenures of 5-8 years while the remainder are backed by rentals, with tenancies averaging 1-2 years.

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