Ascott Raffles Place is said to be on the market under an expression of interest exercise, with the price tag expected to be around $250 million, according to The Business Times.
If a buyer emerges, The Ascott Limited, which owns the 999-year leasehold building, is expected to offer the asset to Ascott Residence Trust (ART), which has the right of first refusal to acquire the property.
The Ascott Limited, CapitaLand’s fully-owned serviced residence business, is the sponsor of ART.
The sale will come with a management contract, possibly of about 10 years, for The Ascott Limited to continue managing the property.
Ascott Raffles Place, a 20-storey building with 146 residences located at No. 2 Finlayson Green, is the only serviced apartment development within the Raffles Place district. It may attract high net worth investors and other players in the country and in the region who are keen on parking their money in a passive investment and leaving its operation and management to one of the best serviced apartment groups in the world.
Market watchers said such players would have more leeway to offer higher bids than the listed-property trust ART, which will be constrained from paying a very high price since that could render the property’s potential acquisition yield decretive rather than being yield accretive to the trust.
The property consists of one-bedroom, two-bedroom and studio units housed in the former Asia Insurance Building.
Ascott acquired the building in 2006 from Asia General Holdings group for about $110 million and spent another $60 million on its refurbishment. In April 2007, the building was gazetted as a conservation building by URA and reopened as Ascott Raffles Place in 2008.