Singapore-listed CapitaLand Ascott Trust has announced the proposed acquisition of a hotel in London, The Cavendish London; a hotel in Dublin, Temple Bar Hotel; and a serviced residence in Jakarta, Ascott Kuningan Jakarta.
CapitaLand Ascott Trust(CLAS) has signed a memorandum of understanding (MOU) with its sponsor, The Ascott Limited (Ascott), for a proposed DPS-accretive acquisition of three lodging assets in the United Kingdom (UK), Ireland and Indonesia at an agreed property value of S$530.8 million.
All three properties are in prime locations within key capital cities. The 230-unit The Cavendish London is well-located in the exclusive Mayfair high-end shopping district of central London and the 136-unit Temple Bar Hotel is in the Temple Bar district, both of which are high-traffic areas near iconic attractions. The 185-unit Ascott Kuningan Jakarta is in the capital city’s central business district, close to embassies and commercial offices.
”Upon completion of the proposed acquisition, CLAS is expected to increase its total distribution by S$13.5 million and its DPS by 1.8% on a FY 2022 pro forma basis. The earnings before interest, taxes, depreciation and amortisation (EBITDA) yield of the proposed acquisition is 6.2% on a FY 2022 pro forma basis,” the REIT said.
The Cavendish London will be renovated and rebranded under The Crest Collection brand, a luxury collection brand managed by Ascott. The property’s valuation is expected to be GBP316.0 million (approximately S$547.2 million) following the renovation and stabilisation of the property in 2027. This is an increase of approximately GBP101.0 million (S$174.9 million) from the as-is valuation of GBP215.0 million (approximately S$372.3 million) as at 30 June 2023. The property is expected to achieve an EBITDA yield on total capitalised cost of approximately 6.5% at stabilisation.
The renovation for The Cavendish London will be carried out in phases from 4Q 2024 to 4Q 2025. Temple Bar Hotel will also undergo renovation from 1Q 2024 to 4Q 2024.
Serena Teo, Chief Executive Officer of the Managers of CLAS, said: “Our accretive acquisition of the three prime lodging assets will enhance the quality and yield of CLAS’ portfolio. They are well-positioned to capture travel demand and the expected growth trajectory of these assets will continue to strengthen CLAS’ income streams. London has been one of our stronger performing markets and Jakarta has been a historically resilient market for us. Our entry to Ireland offers an additional boost to our revenue. Dublin is an attractive destination for leisure visitors, home to some of the world’s largest pharmaceutical companies, and one of the IT hubs of Europe. In keeping with our focus to marry growth with stability, The Cavendish London and Temple Bar Hotel provide CLAS with upside as travel demand continues to recover and downside protection through minimum guaranteed income, while Ascott Kuningan Jakarta’s higher proportion of long-stay guests provides added income resilience.”
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