Global Travel Media » Blog Archive » Ascott Residence Trust Joins Cdl-Capitaland Consortium to Redevelop Liang Court Site with Partial Sale of Its GFA for S$163.3 Million

Home » Hotel Developments » Currently Reading:

Ascott Residence Trust Joins Cdl-Capitaland Consortium to Redevelop Liang Court Site with Partial Sale of Its GFA for S$163.3 Million

November 22, 2019 Hotel Developments No Comments Email Email

Ascott Residence Trust (Ascott Reit) will join City Developments Limited (CDL) and CapitaLand Limited (CapitaLand) to redevelop the Liang Court site into an integrated development. Ascott Reit has signed a put and call option agreement with CDL to divest 15,170 square metres (sq m) of the site’s gross floor area (GFA) for Somerset Liang Court Singapore for S$163.3 million. With net proceeds from the divestment, Ascott Reit will redevelop the retained GFA of 13,034 sq m into a new Somerset serviced residence with a hotel licence. The land’s lease tenure will be refreshed from 57 years to 99 years. Upon completion, the estimated project development expenditure of the new property is approximately S$300 million.

Ascott Reit is expected to recognise a total divestment gain and fair value gain of S$84.3 million. The divestment price of S$163.3 million is 44% above book value and 138% above the acquisition price. The net divestment gain is S$41.5 million and Ascott Reit is expected to realise a S$42.8 million fair value gain from its retained GFA in the land. Its EBITDA yield is estimated to be approximately 4% after the new Somerset serviced residence’s performance stabilises.

Slated to open in 2H 2024, the Somerset serviced residence will offer 192 units. It will be part of the proposed integrated development with a total GFA of 100,263 sq m, that will also comprise two residential towers, a commercial component and a hotel, subject to approval from the relevant authorities. Upon completion, CDL and CapitaLand’s 50:50 joint venture entities will own the residential and commercial components while Ascott Reit will own the Somerset serviced residence. CDL Hospitality Trusts (CDLHT) will own the hotel under a forward purchase agreement with CDL. The proposed integrated development is targeted to open in phases from 2024. In line with the government’s plans to enhance the vibrancy of the precinct, the consortium also plans to rejuvenate the river promenade flanking the integrated development. This is expected to generate social activities around the proposed integrated development, increase footfall and improve pedestrian accessibility along the Singapore River.

Mr Bob Tan, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “This transaction is part of our ongoing strategy to actively reconstitute Ascott Reit’s portfolio to ensure stable returns to unitholders. With the combination of Ascott Reit and Ascendas Hospitality Trust, we have an enlarged balance sheet that gives us greater capacity to redevelop the property, build our pipeline of quality yield-accretive assets and enjoy potential development gain. There are limited completed and yield-accretive assets in Singapore, one of our top five markets contributing 10% to Ascott Reit’s gross profit. This will be our second development project. It will allow Ascott Reit to potentially benefit from the development upside and optimise returns for the benefit of its unitholders.”

He added: “Somerset Liang Court Singapore has enjoyed capital appreciation, and a healthy average occupancy rate of about 90%. With revitalisation plans in place for the Singapore River and Clarke Quay precinct and the proposed construction of a new integrated development, it is an opportune time to recycle our capital into redeveloping our ageing property into a new Somerset serviced residence and refresh the land’s lease to 99 years. We will strengthen our presence in a prime location in Singapore’s popular lifestyle hub. We will continue to seek yield-accretive acquisitions, as well as development and conversion projects to maximise returns for unitholders.”

Comment on this Article:







Platinium Partnership

ADVERTISEMENTS

ADVERTISEMENTS

Premier Partnership Sponsors

ADVERTISEMENTS

Official Media Event Partner

ADVERTISEMENTS

Global travel media endorses the following travel Publication

ADVERTISEMENTS

GLOBAL TRAVEL MEDIA VIDEOS

ADVERTISEMENTS



%d bloggers like this:
%d bloggers like this:
sitemap