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Ascendas Hospitality Trust (A-HTRUST), via Ascendas Hospitality Real Estate Investment Trust, has acquired a portfolio of three hotels in Osaka, Japan for 10.29 billion yen (S$126.1 million).
The purchase consideration, which will be fully funded by debt, represents a 2.9 percent discount to the hotels’ latest valuation of 10.6 billion yen.
The acquisition of the hotels – Hotel WBF Kitasemba East, Hotel WBF Kitasemba West and Hotel WBF Honmachi – is expected to be accretive to distribution per stapled security (DPS) and help deepen the presence of A-HTRUST in Osaka.
On a pro forma basis, A-HTRUST’s DPS for FY2017/18 is expected to increase by 4.3 percent to 6.11 cents.
“The purchase consideration translates to approximately 20 million yen per key, which is relatively low compared to some of the recent hotel transactions in the city. The acquisition will strengthen the cashflow of A-HTRUST by improving the stability of income through master leases for the hotels, which also protects A-HTRUST from the initial stabilising period of the new hotels,” said Tan Juay Hiang, CEO of the managers.
Located within the Honmachi district, the freehold three-star hotels are close to leisure destinations, the central business district and entertainment precinct.
Hotel WBF Kitasemba West was completed in March and commenced operations in May, while both Hotel WBF Kitasemba East and Hotel WBF Honmachi were completed in April and commenced operations in June.
A-HTRUST expects the acquisitions of Hotel WBF Kitasemba East and Hotel WBF Kitasemba West to be completed in September, while the acquisition of Hotel WBF Honmachi is slated for completion in January next year.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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