Singapore-listed Ascott REIT is further expanding its footprint in the United States by acquiring a freehold 224-unit hotel in Times Square South of New York for USD 106 million.
The property, DoubleTree by Hilton, is located in Midtown Manhattan, which is estimated to receive more than 40 million visitors each year, said the hospitality REIT.
The hotel is located on 36th Street, within walking distance to attractions such as Madison Square Garden, and the Empire State Building, and will continue to be managed by a local operator under a franchise of the DoubleTree by Hilton brand.
The acquisition represents Ascott REIT’s third property in Manhattan after Sheraton Tribeca New York Hotel and Element New York Times Square West, and will increase its capacity in the city to 1,004 units.
The purchase is expected to be yield accretive, and will be funded by bank loans, perpetual securities, or a combination of both, said the REIT.
“The U.S. market was our top contributor to revenue in 2016 and 1Q 2017”, said Bob Tan, Chairman of the REIT’s manager.
“Acquisition of yet another quality property in Manhattan would strengthen our foothold in New York, which saw record high visitor arrivals in 2016”, he added, while also noting that Manhattan is currently the strongest performing hotel market in the United States with the highest revenue per room.
Once the acquisition is complete, the United States will be Ascott REIT’s fourth largest market, representing 12.3% of total AUM, which will then be SGD5.3 billion (USD3.8 billion).
Units of Ascott REIT are currently trading on the Singapore Exchange at SGD1.125.