CapitaLand announces merger of Ascott Reit and Ascendas unit, to create APAC’s largest hospitality trust
The merger will create an enlarged portfolio of 88 properties with more than 16,000 units in 39 cities and 15 countries, combining properties such as Ascott Reit’s serviced residences and A-HTRUST’s hotels.
Property developer CapitaLand on Wednesday announced a proposed merger of Ascott Residence Trust (Ascott Reit) and ASCHT-SG (A-HTRUST) to form the largest hospitality trust in the Asia-Pacific region with a total asset value of S$7.6 billion.
The combined entity will be the eighth largest globally and the seventh largest trust listed on the Singapore Exchange by asset value, the real estate investment trusts (Reits) said in regulatory filings on the bourse.
The merger will create 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, combining properties such as Ascott Reit’s serviced residences and A-HTRUST’s hotels.
The merger is at a consideration price of around S$1.24 billion, comprising S$61.8 million in cash and 902.8 million new units of the new enlarged entity, Ascott Reit-BT.
The merger will be done through a trust of scheme 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 units issued at a price of S$1.30.
The combined entity will have a higher proportion of stable income derived from master leases; well balanced by growth income derived from management contracts, said Mr Bob Tan, Ascott Residence Trust Management Limited’s chairman.
‘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 the financial year of 2018 on a pro-forma basis,’ Mr Tan said. ‘With access to a larger capital base and a higher debt headroom of about S$1 billion, we will have greater financial flexibility to seek more accretive acquisitions and value enhancements,’ he added.
Mr Chia Kim Huat, the lead independent director of the A-HTRUST Managers commented: ‘The combination is a transformational transaction consistent with A-HTRUST’s strategy to create a stronger, diversified and resilient platform that will deliver sustainable growth to investors.'
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Act on stock opportunities today
Go long or short on thousands of international stocks with CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
