Ascott Reit has agreed to buy three serviced residences in China and 11 rental residential properties in Japan for a total of S$287 million.
This will raise FY2012 distribution per unit by 2.9 per cent – from 8.76 cents to 9.01 cents.
Ascott Reit said the three serviced residences in China are located in Shanghai, Shenyang and Suzhou and they will continue to be managed by Ascott.
It will also be buying a portfolio of 11 rental properties (959 apartment units) across six cities in Japan, namely Fukuoka, Sapporo, Kyoto, Hiroshima, Saga and Sendai.
Besides adding 1,576 apartment units to its current 7,060 apartment units, the acquisitions will increase the trust’s asset size by 11 per cent to S$3.1 billion.
The trust added that its share of assets from Asia will increase from 59 per cent to 63 per cent of its total asset value.
The number of cities where Ascott Reit has its presence will also be increased from 25 to 32 cities.
It is also actively on the lookout for acquisition targets.
Chief executive officer of Ascott Residence Trust Management, Ronald Tay said: “Hopefully we will be able to make some acquisitions in the second half of the year. We continue to like Asia very much. So the key markets like Singapore China, and potentially India as well as a new market. For Europe, we will continue to look at Europe on an opportunistic basis. Markets that we like are in Europe include London, Paris and key gateway cities in Germany. “
The acquisitions will be funded partly by the S$150 million raised from Ascott Reit’s equity placement earlier this year and the balance will be funded by debts.
Source : Channel NewsAsia – 2 May 2013