Ascendas Hospitality Trust sells its only two China properties for $235.9 mil

By Michelle Zhu / The Edge Singapore | January 30, 2018 10:57 AM SGT
SINGAPORE (Jan 29): The managers of Ascendas Hospitality Trust (A-HTRUST) are selling two hotel properties, Beijing Novotel Sanyuan and Ibis Beijing Sanyuan, for a total of RMB1.156 billion ($235.9 million) in cash.
Beijing Novotel Sanyuan is a mid-scale, 17-storey hotel located in the Chaoyang District of Beijing, China. It offers 306 guest rooms.
Ibis Beijing Sanyuan is a 14-storey economy hotel with 397 guest rooms, and is located adjacent to Novotel Beijing Sanyuan.
Beijing Novotel Sanyuan (Credit: Ascendas Hospitality Trust)
Following the sale of the Beijing hotels, A-HTRUST will no longer have any properties in China.
In a Monday announcement, A-HTRUST’s managers say the purchase price represents a premium of 101.5% to the Beijing hotels’ latest combined valuation of RMB574 million as at end-Oct 2017, as well as a premium of 178% to their initial purchase price when they were acquired for listing in 2012.
The managers say their divestment of the two hotels is in line with the trust’s active asset management strategy.
The net proceeds from the sales will be substantially used for the repayment of existing loans, asset enhancement opportunities, future acquisitions and working capital, they add.
A-HTRUST’s managers also intend to distribute a portion of the net proceeds to stapled security holders following completion of the divestment, which is expected to take place in the first half of FY18/19.
According to Tan Juay Hiang, CEO of the managers, the purchase price of RMB1.156 billion translates to a net property income (NPI) yield of 3.3% and hence makes a compelling offer that creates substantial value for the trust’s stapled security holders.
This story, written by Michelle Zhu for The Edge Singapore, first appeared on Jan 29.