Ascott Residence Trust (Ascott Reit) has entered into an agreement with Winner Sight Investments Limited to purchase its first serviced residence in Dalian, China for RMB571 million (S$118.6 million) at an EBITDA yield of 5.5 percent.
The accretive acquisition is expected to increase FY2013 distribution per unit by 1.5 percent from 8.40 cents to 8.53 cents.
The 195-unit serviced residence (pictured) provides easy accessibility to the city and Dalian Zhoushuizi International Airport. It is a 25-minute drive from Dalian North Railway Station and within walking distance to the metro station as well as a supermarket, international schools and hospital.
Part of a mixed-use development that also comprises an office tower and a retail podium, the serviced residence features one- to three-bedroom apartments and penthouses. Facilities include a gymnasium, business centre, swimming pool, spa and children’s play area.
Lim Jit Poh, Chairman of Ascott Reit’s manager, said: “This is Ascott Reit’s first acquisition after our successful rights issue in December 2013 which raised S$253.7 million. It demonstrates our ability to redeploy the funds by investing in yield accretive assets. While this acquisition in Dalian is from a third party, we are also looking at potential acquisitions from our sponsor, The Ascott Limited (Ascott), in key cities in China, Japan, Australia, Malaysia and Europe.”
In China, Ascott Reit currently owns seven serviced residences with more than 1,200 apartment units across Beijing, Guangzhou, Shanghai, Shenyang, Suzhou and Tianjin.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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