Ascott Residence Trust acquires latest New York property
Ascott Residence Trust is adding another prime property to its global portfolio by acquiring the 224-unit DoubleTree by Hilton Hotel New York – Times Square South for US$106 million.
The freehold property is located in Midtown Manhattan near Times Square, one of the most visited locations in the world, with more than 40 million visitors each year.
The accretive acquisition at an EBITDA yield of six per cent is expected to increase Ascott Reit’s pro forma distribution income in financial 2016 by US$0.9 million, translating to a rise in distribution per unit from 7.23 cents to approximately 7.29 cents on a pro forma basis.
The acquisition will be funded by bank loans and/or perpetual securities.
With this acquisition, Ascott Reit owns three strategically located properties in Manhattan, comprising 1,004 units.
Bob Tan, Ascott Residence Trust Management, chairman, said: “The US market was our top contributor to revenue in 2016 and quarter one 2017.
“Acquisition of yet another quality property in Manhattan would strengthen our foothold in New York, which saw record high visitor arrivals in 2016.
“New York has strong corporate demand for accommodation as business travellers form a quarter of all visitors annually, generating over 30 per cent of visitor spending.
“Manhattan has the strongest performing hotel market in the US with the highest revenue per room.
“This DoubleTree by Hilton Hotel New York – Times Square South, as well as Sheraton Tribeca New York Hotel and Element New York Times Square West hotel, which we acquired in the last two years, enjoy high average occupancy rate of more than 90 per cent.
“We expect this accretive acquisition to enhance Ascott Reit’s portfolio as we remain focused on creating stable and growing returns to Unitholders.”
DoubleTree by Hilton Hotel New York – Times Square South is located on 36th Street, within walking distance to many of Manhattan’s attractions such as Times Square, Madison Square Garden, the Jacob Javits Convention Centre and the Empire State Building.
The property offers a range of stylish rooms and facilities including a 24-hour fitness centre, business centre, meeting rooms, a restaurant and bar.
It is also close to Penn Station, the busiest train station in North America which sees over 200 million passengers a year travelling to and from other gateway cities in the US.
Ascott Reit was established with the objective of investing primarily in real estate and real estate-related assets which are income-producing and which are used or predominantly used, as serviced residences, rental housing properties and other hospitality assets.
Beh Siew Kim, ARTML chief executive, said: “This acquisition will reinforce Ascott Reit’s position as the largest hospitality Reit by asset size and the most geographically diversified Reit in Singapore.
“With this acquisition, the US would be our fourth biggest market, forming 12.3 per cent of Ascott Reit’s total assets worth S$5.3 billion, following closely after China, Japan and Singapore.
“We continue to maintain a balanced portfolio across the various geographies to provide stable returns to Unitholders.”