CapitaLand enhances balance sheet flexibility

Aside from the establishment of a Note Programme, CapitaLand also announced its acquisition of a London hotel.

OCBC Investment Research noted:

The serviced residence business unit of CapitaLand (CAPL), the Ascott Limited, has agreed to acquire a hotel in London, the 230-unit Cavendish London, for GBP158.8m (S$311m). The group expects to convert the asset into a serviced residence under the Ascott brand and rename it the Ascott St James London.

The development is located on Jermyn St, in the St. James area of Mayfair, and would increase Ascott’s portfolio to seven properties in Central London. At a price of S$1.35m per room, we believe that the price paid is fair and see little accretion to CAPL’s RNAV at this juncture.

In addition, we also note that CAPL has announced last Friday the establishment of a S$5b Euro Medium Term Note Programme, further increasing its accessibility to the capital markets and enhancing its balance sheet flexibility.