Ascott Reit acquires Malaysia, China serviced residences for S$173.9m
- POSTED: 07 Jul 2014 08:30
- UPDATED: 07 Jul 2014 23:38
Reit announces it has entered into conditional agreements to buy properties in Kuala Lumpur, Wuhan and Xi'an.
SINGAPORE: Ascott Residence Trust, also known as Ascott Reit, announced on Monday (July 7) that it has entered into conditional agreements to acquire its first serviced residence in Kuala Lumpur, Malaysia, as well as properties in Wuhan and Xi’an in China at a total property value of S$173.9 million.
Ascott Reit will acquire the 207-unit Somerset Ampang Kuala Lumpur from The Ascott Ltd for RM175 million (S$67.4 million), it said in a statement on Monday. It will also acquire the 249-unit Citadines Zhuankou Wuhan and the 251-unit Citadines Gaoxin Xi’an for 252 million yuan (S$51.4 million) and 270 million yuan (S$55.1 million), respectively, from Ascott Serviced Residence (China) Fund, in which Ascott holds a 36.1 per cent stake.
The three serviced residences will continue to be managed by Ascott.
Adding some 700 units to its portfolio, Ascott Reit's international portfolio comprises 83 properties across 12 countries in the Asia-Pacific and Europe, and it expects the acquisitions to enhance its geographical diversity.
Ascott REIT said it anticipates strong demand for serviced residences in China due to increasing business travel.
And it is positive on growth prospects in Malaysia, given the country's pro-business policies.
Mr Ronald Tay, CEO of Ascott Residence Trust, said: "Hopefully this will be our first of many acquisitions into Malaysia for the service residence point of view. What we like is that we're able to go into a city that can give us a lot more scale, so that economies of scale will drive costs down for us, and we'll be able to have a much bigger platform in terms of our presence either in the city itself or the country."