Ascott REIT to acquire Japan, China properties for S$287.4m

Covers 3 serviced residences and 11 rentals.

Ascott Residence Trust (Ascott Reit) has announced that it entered into conditional agreements to acquire three prime serviced residences in China and a stable portfolio of 11 rental housing properties in Japan (the Acquisitions) for S$287.4 million at an EBITDA yield of 5.4%.

On a pro forma basis, the accretive Acquisitions are expected to increase FY 2012 distribution per unit by 2.9% from 8.76 cents to 9.01 cents. Ascott Reit will acquire Citadines Biyun Shanghai and Somerset Heping Shenyang for RMB321 million (approximately S$63.2 million) and RMB438 million (approximately S$86.2 million) respectively from Ascott Serviced Residence (China) Fund, in which The Ascott Limited (Ascott) holds a 36.1% stake. Ascott Reit will acquire Citadines Xinghai Suzhou from Ascott for RMB118 million (approximately S$23.2 million).

On a pro forma basis, the accretive Acquisitions are expected to increase FY 2012 distribution per unit by 2.9% from 8.76 cents to 9.01 cents. Ascott Reit will acquire Citadines Biyun Shanghai and Somerset Heping Shenyang for RMB321 million (approximately S$63.2 million) and RMB438 million (approximately S$86.2 million) respectively from Ascott Serviced Residence (China) Fund, in which The Ascott Limited (Ascott) holds a 36.1% stake. Ascott Reit will acquire Citadines Xinghai Suzhou from Ascott for RMB118 million (approximately S$23.2 million).

The three serviced residences in China will continue to be managed by Ascott.

In addition, Ascott Reit will acquire 11 rental housing properties in Japanfor JPY9.2 billion (approximately S$114.8 million) from ACRJ3 Pte. Ltd., an 88.9% owned subsidiary of Ascott. The rental housing properties have a total of 959 apartment units across six cities in Japan, namely Fukuoka, Sapporo, Kyoto, Hiroshima, Saga and Sendai.

Mr Lim Jit Poh, Ascott Residence Trust Management Limited's (ARTML) Chairman, said: “Asia remains a hotspot for Ascott Reit to grow. We are acquiring quality assets in China and Japan, two of the world‟s largest economies. This will increase our Asia portfolio from 59% to 63% of our total asset value. The Acquisitions demonstrate our ability to invest the S$150 million raised recently from our equity placement which was completed on 6 February 2013."

Mr Lim added: “The Acquisitions will broaden Ascott Reit's earning base and increase the scale of our portfolio. Besides adding 1,576 apartment units to our current 7,060 apartment units, Ascott Reit‟s asset size will increase by 11% from S$2.8 billion to S$3.1 billion. The number of cities where Ascott Reit has its presence will also be increased from 25 to 32 cities. These will raise our profile amongst global investors.”

Mr Ronald Tay, ARTML's Chief Executive Officer, said: “China is a key growth market for Ascott Reit. The Acquisitions will deepen our presence in Shanghai as its economy continues to grow and demand for serviced residences remains strong. We will also expand to the growing cities of Shenyang and Suzhou.”