Somerset Central TD Hai Phong City (Ascott Residence Trust)

Ascott Residence Trust (ART) has launched a private placement exercise to raise gross proceeds of about SGD150 million from institutional and accredited investors.

New units under the exercise will be issued at between SGD1.110 and SGD1.140, and the placement is subject to an upsize option for a further SGD50 million.

About 81.5% of the gross proceeds will be used to partially fund the nine-asset acquisition that was announced on 15 August.

ART announced that day that it is acquiring serviced residences, rental housing and student accommodation properties across five countries from its sponsor, The Ascott Limited.

The acquisition has an estimated total capitalised cost of SGD318.3 million.

The acquisition includes three serviced residences of which two, Quest Cannon Hill in Brisbane, Australia and La Clef Tour Eiffel Paris in France, are on master leases.

A third serviced residence, Somerset Central TD Hai Phong City in Hai Phong, Vietnam, caters mainly to corporate guests and has an average length of stay of about 11 months.

It also consists of five rental housing properties in Japan that have typical lease tenures of about two years.

The assets are in Kyoto, Osaka, Hyogo and Nagoya.

Meanwhile in South Carolina, USA, ART is doubling its stake in Standard at Columbia, acquiring an additional 45% stake in the student accommodation property.

The acquisition will grow ART’s total assets to SGD8.3 billion as of 31 December 2021 on a pro forma basis.

The placement will increase the number of units in ART by up to approximately 180,181,000, which is an increase of approximately 5.5%.

ART was last done on the Singapore Exchange (SGX) at SGD1.18, which presently implies a distribution yield of 3.95% according to data on the Singapore REITs table.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.