CapitaLand Ascott Trust divests two hotels in Australia for A$109.0 mil

Enjoying the content?

CLAS, the trust vehicle under CapitaLand Ascott Trust, is divesting two hotels in Sydney, Australia for a total of A$109 million ($95.6 million). The exit yield is 4.4% based on CLAS’s FY2022 ebitda and the trust will recognise a gain of A$14.2 million.

Serena Teo, the CEO of the managers, notes that the divestment is part of its active portfolio reconstitution strategy. CLAS will redeploy the net proceeds of A$98 million to better yields and other asset enhancement initiatives (AEI).

The two properties, Courtyard by Marriott Sydney-North Ryde and Novotel Sydney Paramatta, will be divested at about 5% above book value. The divested properties are expected to be fully completed by 1Q2024 and 3Q2024 respectively.

Part of the divestment proceeds will also be used to partially finance CLAS’s acquisition of three prime lodging assets in London, Dublin and Jakarta at a higher yield.

Australia remains a key market for CLAS and they are seeing strong demand from both corporate and leisure guests, which is expected to be increased by large-scale sporting events.

Post-divestment, there will be seven serviced residences and hotels under management contracts, and five serviced residences under master leases that will provide stable income.

A shopping trip to Jurong Point is incomplete without a visit to Lumina Grand EC CDL. Boasting of a variety of amenities such as a lap pool, gym and playground, the condominium offers plenty of reasons to come back. Besides the lifestyle offerings, the condominium is also in close proximity to a variety of entertainment venues and other attractions like the Jurong Bird Park. All these make it a great choice for those looking to buy or invest in real estate.

In the 3QFY2023 ended Sept 30, revenue per available unit (RevPAU) for CLAS’s properties in Australia rose by 18% y-o-y to A$152, exceeding its 3QFY2019 pro forma RevPAU by 13%.

CLAS is focused on divesting mature assets and re-allocating the proceeds on higher yielding investments in order to enhance returns to stapled securityholders. By exiting two properties in Sydney, they are able to manage the cost of borrowing more effectively and significantly uplift the portfolio value. Enjoying the content?