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Ascott Residence Trust and Ascendas Hospitality Trust to become Asia Pacific’s largest hospitality trust

Park Hotel Clarke Quay.

DPU accretive transaction to create an enlarged trust with wider investor base and greater financial flexibility.

SINGAPORE – Ascott Residence Trust (Ascott Reit) and Ascendas Hospitality Trust (A-HTRUST) jointly announced a proposed combination, which will result in the combined entity becoming the largest hospitality trust in Asia Pacific1, and the eighth largest globally1, with an asset value of S$7.6 billion. The combined entity will also become the seventh largest trust1 listed on the Singapore Exchange by asset value.

The total consideration for the Combination is S$1,235.4 million, comprising S$61.8 million in cash and 902.8 million new Ascott Reit-BT Stapled Units2. The Combination will be effected by way of a trust scheme of arrangement, with Ascott Reit acquiring all the A-HTRUST Stapled Units for a consideration of S$1.0868 per A-HTRUST Stapled Unit, comprising S$0.0543 in cash and 0.7942 Ascott Reit-BT Stapled Units issued at a price of S$1.30. The consideration is based on a gross exchange ratio of 0.836x, derived from the audited net asset values (NAV) per A-HTRUST Stapled Unit and Ascott Reit Unit3.

The transaction brings together Ascott Reit’s global portfolio that comprises predominantly serviced residences and A-HTRUST’s 14 quality hotels in Asia Pacific, creating an enlarged portfolio of 88 properties with more than 16,000 units in 39 cities and 15 countries across Asia Pacific, Europe and the United States of America. It will also further diversify Ascott Reit’s global portfolio with foray into new gateway cities – Brisbane and Seoul.

Mr Bob Tan, Ascott Residence Trust Management Limited’s Chairman, said: “The Combination is a win-win for both Ascott Reit’s and A-HTRUST’s unitholders. Ascott Reit as a combined entity will see our asset value grow by 33% to S$7.6 billion and our Distribution per Unit increase by 2.5% for FY 2018 on a pro forma basis. The combined entity will have a higher proportion of stable income derived from master leases; well balanced by growth income derived from management contracts. With access to a larger capital base and a higher debt headroom of about S$1.0 billion, we will have greater financial flexibility to seek more accretive acquisitions and value enhancements. The combined entity can then be strategically positioned to potentially enjoy a positive re-rating of the unit price and gain a wider investor base, which would be beneficial to all our unitholders.”

(1) Based on data extracted from Bloomberg as at 28 June 2019.
(2) Based on an issue price of S$1.30 for each Ascott Reit-BT Stapled Unit and calculated based on a total of
1,136.7 million A-HTRUST Stapled Units.
(3) Based on A-HTRUST’s audited NAV per Stapled Unit as at 31 March 2019 of S$1.02 divided by Ascott Reit’s
audited NAV per Unit as at 31 December 2018 of S$1.22. 

Co-Founder & Chief Editor - TravelDailyNews Media Network | Website | + Posts

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.

She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.