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CapitaLand Ascendas REIT divests local industrial building at 219% premium from 2005 purchase price

The manager of CapitaLand Ascendas REIT (CLAR) has announced the divestment of Singapore industrial building KA Place for a consideration of $35.38 million. According to an April 20 filing, the REIT’s trustee, HSBC Institutional Trust Services (Singapore), has entered into a sale and purchase agreement to sell KA Place to KA Place SPV 1.

This consideration sum represents a 219% premium to the REIT’s purchase price of $11.1 million, back in March 2005. Moreover, it was a 55% premium to the property’s market valuation of $22.8 million as at December 31, 2022.

KA Place is a seven-storey high-specification industrial building located on 159 Kampong Ampat. It also boast of a carpark on the second storey, with a total gross floor area of 10,163sq m. KA Place also has a remaining land lease tenure of about 35 years.

The decision to divest KA Place was made in line with the manager’s proactive asset management strategy. In doing so, the manager attempted to improve the quality of CLAR’s portfolio and optimise returns for unitholders.

Assuming the proposed divestment was completed on January 1, 2022, it would have had a pro-forma impact on CLAR’s net property income (NPI) and distribution per unit (DPU) for the financial year ended December 31, 2022. This would have resulted in a decrease of $0.92 million and 0.005 Singapore cents respectively.

Net proceeds after divestment costs are expected to amount to $30.65 million. The manager has asserted that the net proceeds generated may be recycled to fund committed investments, repay existing indebtedness, extend loans to subsidiaries, fund general corporate and working capital needs and/or make distributions to unitholders.

Should the proceeds all be used to repay CLAR’s borrowings as at December 31, 2022, then the REIT’s aggregate leverage will be reduced from 36.3% to approximately 36.2%. The proposed divestment is expected to be completed within the second quarter of 2023.

Once the divestment is concluded, CLAR will own 229 properties spread across 96 properties in Singapore, 36 properties in Australia, 48 properties in the United States and 49 properties in the United Kingdom and Europe.

Additionally, in accordance with the trust deed dated October 9, 2002 constituting CLAR, the manager is entitled to a divestment fee of 0.5% of the sale consideration of the property, paid in cash.
Units in CapitaLand Ascendas REIT closed 3 cents higher, or 1.05% up, at $2.88 on April 20.

Units in CapitaLand Ascendas REIT (CLAR) closed 3 cents higher, or 1.05% up, at $2.88 on April 20. This following the manager’s announcement of their decision to divest Singapore industrial building KA Place for a consideration of $35.38 million.

The consideration received for the divestment of KA Place was a 219% premium to the REIT’s purchase price of $11.1 million, back in March 2005.
Moreover, it was a 55% premium to the property’s market valuation of $22.8 million as at December 31, 2022.

KA Place is a seven-storey high-specification industrial building located on 159 Kampong Ampat and comprises of a total gross floor area of 10,163sq m and a remaining land lease tenure of about 35 years.

The decision to divest KA Place was made in line with the manager’s proactive asset management strategy to improve the quality of CLAR’s portfolio and optimise returns for unitholders.

Assuming the proposed divestment was completed on January 1, 2022, it would have had a pro-forma impact on CLAR’s net property income (NPI) and distribution per unit (DPU) for the financial year ended December 31, 2022, with a decrease of $0.92 million and 0.005 Singapore cents respectively.

Net proceeds after divestment costs are expected to amount to $30.65 million, which may be recycled to fund committed investments, repay existing indebtedness, extend loans to subsidiaries, fund general corporate and working capital needs and/or make distributions to unitholders.

Should the proceeds all be used to repay CLAR’s borrowings as at December 31, 2022, then the REIT’s aggregate leverage will be reduced from 36.3% to approximately 36.2%. The proposed divestment is expected to be completed within the second quarter of 2023.

In accordance with the trust deed dated October 9, 2002 constituting CLAR, the manager is entitled to a divestment fee of 0.5% of the sale consideration of the property, paid in cash.

Upon completion, CLAR will own 229 properties spread across 96 properties in Singapore, 36 properties in Australia, 48 properties in the United States and 49 properties in the United Kingdom and Europe.

Units in CapitaLand Ascendas REIT closed 3 cents higher, or 1.05% up, at $2.88 on April 20. The proposed divestment is expected to complete within the second quarter of 2023 and suggests improved prospects for unitholders as the manager continues to seek out value-adding opportunities.…

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Ascott targets to double fee revenue to over $500 mil in next five years

The Ascott Limited, the lodging business unit of CapitaLand Investment’s (CLI), has achieved its target of 160,000 units and is now looking to double its fee revenue to over $500 million in the next five years. Ascott has recorded its highest earnings on record of $258 million in FY2022, a 36% y-o-y growth due to its record signings and property openings.

In an announcement, Ascott stated it plans to keep expanding its product offerings that include serviced residence, hotel, co-living, and senior living brands, positioned from mid to luxury scale. The aim is to drive fee revenue growth through new property openings and new signings with an estimated annual net room growth rate of 8%-10% in the next five years.

Kevin Goh, CEO of Ascott and CLI Lodging, proudly said that Ascott was able to double its units every five years from about 20,000 units in 2008 to over 160,000 units today, thanks to the adoption of an asset-light strategy. He believes today’s record-high fee revenue is a testament to this. Goh further highlighted that more than 80% of units are under management and franchise contracts, which typically bring in recurring fee revenue and tenures of longer duration.

In order to achieve its growth target, Ascott intends to acquire more management and franchise contracts for prime properties that deliver higher-quality fees. In addition, the firm wants to leverage its strong brand equity and direct distribution channels to deliver greater value to property owners and customers.

Ultimately, Ascott looks forward to continuing its success to become the largest international lodging owner-operator globally.…