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Ascott Residence Trust (Ascott Reit) has agreed to sell Ascott Raffles Place Singapore to private investor Cheong Sim Lam for $353.3 million.
The sale price is 64.3 percent above the property’s latest valuation of $215 million as at 31 December.
Ascott Reit is expected to realise a net gain of about $134 million from the sale, which it intends to allocate to new investment opportunities.
Located at 2 Finlayson Green, Ascott Raffles Place Singapore opened in 2008 featuring 146 serviced apartment units. It has a gross floor area of 168,952 sq ft and a leasehold tenure of 999-years.
The son of the late real estate tycoon Cheong Eak Chong who developed Hyatt Regency Singapore, International Plaza and Pacific Mansion, S L Cheong is also the developer of various residential projects such as Robinson Suites and is the previous owner of 137 and 139 Cecil Street, revealed Cushman & Wakefield, which brokered the sale.
The transaction is expected to be completed in May.
“The divestment is in line with Ascott Reit’s strategy to proactively reconstitute our portfolio to optimise returns for unitholders,” said Beh Siew Kim, CEO of Ascott Residence Trust Management Limited.
“The sale will give us the financial flexibility to recycle capital and invest in higher-yielding properties. We may also use the sale proceeds to pay down debt which will then increase our debt headroom for potential acquisitions of quality assets or to develop our own properties such as lyf one-north Singapore to enhance Ascott Reit’s portfolio.”
And while the property accounted for three percent of the trust’s gross profit for the nine months ended 30 September 2018, Beh does not expect the sale to materially affect the financial performance of Ascott Reit.
Other operational properties of Ascott Reit in Singapore are Citadines Mount Sophia Singapore, Somerset Liang Court Singapore and Ascott Orchard Singapore. lyf one-north Singapore is slated to open in 2021.
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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