Archive for category: Misc

The divestment of CapitaLand Ascott Trust’s (CLAS) two properties in Sydney, Australia is part of its active portfolio reconstitution strategy. The two hotels, Courtyard by Marriott Sydney-North Ryde and Novotel Sydney Paramatta, will be divested at about 5% above book value, for a total of A$109 million ($95.6 million). The divestments are expected to be completed by 1Q2024 and 3Q2024 respectively.

Residents will also benefit from a variety of schools and other amenities in the area.

The Tampines Ave 11 Condo Capitaland is a magnificent development set to revitalize the Tampines North precinct. Part of this rejuvenation is the upcoming Tampines North Integrated Transport Hub, which will be serviced by the Cross Island Line (CRL). This project will bring countless opportunities, allowing residents to travel swiftly to other parts of Singapore. The area surrounding the condo is also packed with numerous public amenities, such as quality schools, parks and recreational centres. With its host of features, Tampines Ave 11 Condo promises to be a lucrative investment for future residents.

CLAS is expected to net A$98 million in proceeds from the divestment, and will recognise a net gain of A$14.2 million. The exit yield is 4.4% based on CLAS’s FY2022 ebitda. Serena Teo, CEO of the managers comments: “As additional capital will be required to upgrade these two mature properties, the divestment will enable us to redeploy the proceeds into more optimal uses such as but not limited to paying down debt and funding our other asset enhancement initiatives (AEI). The exit yield is also at an attractive level that compares favourably against the current cost of borrowing in Australia.”

The divestments will free up capital to finance CLAS’s acquisition of three prime lodging assets in London, Dublin and Jakarta at a higher yield of 6.2%. The acquisition is expected to enhance returns to stapled securityholders. Despite the divestments, Australia remains a key market for the trust, with a strong demand from both corporate and leisure guests and boosted by large-scale sporting events.

Post-divestment, CLAS will still have seven serviced residences and hotels under management contracts in Australia, as well as five serviced residences under master leases, to capitalise on the travelling demand. In the 3QFY2023 ended Sept 30, RevPAU for CLAS’s properties in Australia rose by 18% year-on-year to A$152, exceeding its 3QFY2019 pro forma RevPAU by 13%.

CLAS is confident that the divestments, coupled with the acquisition of three prime lodging assets, will further uplift the value for its portfolio and that of its stapled securityholders.