Ascott Reit makes maiden foray into the US with $221.2m hotel acquisition

It’s a prime property located in Times Square.

Ascott Residence Trust today revealed that it has acquired a prime hotel in Midtown Manhattan for $221.2m (USD163.5m).

This acquisition marks its maiden foray into the United States. The property is the 411-key Element New York Times Square West hotel, located in New York’s Times Square.

Ascott Reit said that the accretive acquisition at an EBITDA yield of 6.2% is expected to increase Ascott Reit’s distribution income in FY 2014 by USD0.8 million, translating to a rise in distribution per unit from 8.44 cents to 8.51 cents on a pro forma basis.

After the acquisition, the property will continue to be operated by LG-39 Management LLC and its affiliates under the ‘Element’ brand through a franchise by Starwood Hotels & Resorts Worldwide, Inc.

Ascott Reit will partly fund the acquisitions of the properties in Australia, Japan and the U.S. with the S$250 million proceeds from its issuance of perpetual securities at a fixed distribution rate of 4.68% per annum.