Signature West Midtown (Ascott Residence Trust)

Data from Ascott Residence Trust’s latest results have been updated into the Singapore REITs table.

Ascott Residence Trust (ART) announced on 27 January that it will foray into the student accommodation asset class.

It will be carrying out its first acquisition of this asset class in the US for USD95 million.

The purpose-built student accommodation asset, Signature West Midtown, is a freehold property with 525 beds across 183 units located in the heart of Atlanta, Georgia.

The transaction is expected to be completed by end 1Q 2021, and will increase the pro forma FY 2020 distribution per stapled security (DPS) by approximately 4.4%.

“Student accommodation is one of the most resilient real estate asset classes and has maintained high occupancy during the COVID-19 situation in the USA”, said Bob Tan, Chairman of ART’s manager.

“ART will continue to seek opportunities for quality student accommodation assets in key markets with strong student population growth”.

"We will also look at expanding our rental housing portfolio. We remain focused on delivering sustainable value for our stapled securityholders”, Tan added.

The acquisition is expected to be funded with divestment proceeds, and will add an approximate 4.4% to DPS for FY 2020 on a pro forma basis.

On the same day ART announced that the distributable income for 2H 2020 is a 32% decline compared to 2H 2019.

To mitigate the impact of COVID-19, replace loss income from divested assets and to share past divestment gains, a one-off partial divestment gain of SGD40.0 million will be distributed.

ART also released the SGD5.0 million of distributable income which was retained in 1H 2020.

As such, DPS for 2H 2020 is 1.99 cents, a 52% decrease compared to 4.18 cents in 2H 2019.

The trust’s full statement on its results and the acquisition can be viewed here.

ART was last done on the SGX at SGD1.05, which implies a distribution yield of 3.7% according to data compiled on the Singapore REITs table.

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.