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SINGAPORE (May 31): Ascott Residence Trust (ART) is acquiring DoubleTree by Hilton Hotel New York – Times Square South for US$106 million (S$148.4 million or RM454.2 million), a 224-unit freehold property located on 36th Street in Midtown Manhattan.
The manager of ART says the acquisition is accretive. Its EBITDA yield of 6.0% is expected to increase the REIT’s pro forma distribution income in FY16 by US$0.9 million, translating to a rise in distribution per unit from 7.23 Singapore cents to 7.29 Singapore cents on a pro forma basis.
The acquisition will likely be funded by bank loans and perpetual securities.
The hotel will continue to be managed by an established local operator under a franchise of the upscale DoubleTree by Hilton brand.
With the acquisition, the trust will now own three properties in Manhattan comprising a total of 1,004 units.
It also makes the US ART’s fourth biggest market by forming 12.3% of the trust’s total assets worth S$5.3 billion (RM16.4 billion), following closely after China, Japan and Singapore.
“The property has a good mix of corporate and leisure guests, and has been achieving strong performance since its opening in 2008. We expect demand for the property to increase as the nearby Hudson Yards, the largest private development in the US, progressively opens,” says Beh Siew Kim, CEO of the manager.
While Hudson Yards is to be completed in 2025, 88% of the 5.8 million sq ft of office space, currently under construction or has been completed, is already committed as of December 2016.
Units of ART closed 0.45% higher at S$1.12 on Tuesday. — theedgemarkets.com.sg
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