Ascott REIT's property in Singapore, Ascott Raffles Place. (Photo: REITsWeek)

Singapore-listed hospitality REIT, Ascott Residence Trust (SGX:A68U), announced on 23 June that it has successfully raised SGD250 million from the issuance of perpetual securities at a fixed distribution rate of 4.68% per annum.

“The perpetual securities received strong investor participation with orders exceeding four times of the issue size”, said the REIT in an official statement on the issuance. “Proceeds from the perpetual securities will be used to fund potential acquisitions in the future” it added.

Chairman of the REIT’s manager, Lim Jit Poh, has described the issuance as part of Ascott REIT’s strategy to tap diversified funding sources in seizing growth opportunities.

“Perpetual securities is a good source of funding to finance our acquisitions while maintaining our gearing at about 40%”, said Lim who added that the REIT is actively pursuing acquisitions to enlarge its portfolio to the target asset size of SGD6.0 billion by 2017.”

The perpetual securities will be accounted as equity and will be unrated. However in April 2015, Moody’s Investors Service improved Ascott REIT’s rating from Baa3 corporate family rating to Baa3 issuer rating.

Units of Ascott REIT are currently listed on the Singapore Exchange at SGD1.28.

Ascott REIT's acquisition in Shinjuku, Tokyo will be converted and rebranded into a Citadines-branded serviced residence.
Ascott REIT's acquisition in Shinjuku, Tokyo has been converted and rebranded into a Citadines-branded serviced residence.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.