64.4 million new units of Singapore-listed stapled security Ascendas Hospitality Trust (A-HREIT) (SGX:Q1P) started trading on the Singapore Exchange today. The new units were issued in a preferential offering exercise where current unit holders were offered two new stapled securities for every 25 units held in A-HREIT. The exercise raised some S$56.7 million in capital.
|Ascendas Hospitality Trust's portfolio now consists of 11 properties across Australia, China , Japan and now Singapore.|
The amount of money was raised, together with a private placement, to partially fund the acquisition of A-HREIT's first property in Singapore - Park Hotel Clarke Quay. With this issue, the total number of stapled securities in issue under A-HREIT has increased to 1,031,422,949 units.
Park Hotel Clarke Quay is located in the vibrant Clarke Quay area along the bank of the Singapore River and in close proximity to the Central Business District, Orchard Road, Marina Bay, the Civic District and Chinatown.
The acquisition was done to increase the geographical diversity of A-HREIT which already has 10 hospitality residences in Australia, Japan and China. "It also reduces our exposure to foreign exchange risks and improves the currency alignment of A-HTRUST’s cash flows vis-à-vis its distributions. We believe that Park Hotel Clarke Quay’s stable master lease structure with high fixed rent component will contribute significantly to the stability of A-HTRUST’s cash flows", said Mr Tan Juay Hiang, Chief Executive Officer of the Manager for A-HREIT.
Following the completion of the acquisition, the Park Hotel Group will continue to operate the hotel under a master lease for a term of 10 years, with an option to extend for another 5-year term subject to mutual agreement.
Units of A-HREIT dipped by 1.76 percent at the close of the trading day to end at S$0.835.