Capitaland has announced a proposed combination of its Ascott Residence Trust and Ascendas Hospitality Trust units.
If completed, the deal will result in the combined entity becoming the largest hospitality trust in Asia Pacific, and the eighth largest globally.
It will have an asset value of S$7.6 billion.
The combined entity will also become the seventh largest trust listed on the Singapore Exchange by asset value.
The total consideration for the combination is S$1,235 million, comprising S$61.8 million in cash and 902.8 million in new Ascott Reit-BT Stapled Units.
The combination will be created by way of a trust scheme of arrangement, with Ascott Reit acquiring all the A-HTRUST Stapled Units for a consideration of S$1.0868 per A-HTRUST Stapled Unit, comprising S$0.0543 in cash and 0.7942 Ascott Reit-BT Stapled Units.
The consideration is based on a gross exchange ratio of 0.836x, derived from the audited net asset values per A-HTRUST Stapled Unit and Ascott Reit Unit.
The transaction brings together Ascott Reit’s global portfolio that comprises predominantly serviced residences and A-HTRUST’s 14 quality hotels in Asia Pacific, creating an enlarged portfolio of 88 properties with more than 16,000 units in 39 cities and 15 countries across Asia Pacific, Europe and the United States of America.
It will also further diversify Ascott Reit’s global portfolio with foray into new gateway cities – Brisbane and Seoul.
Beh Siew Kim, Ascott Residence Trust Management chief executive, said: “The combination is in line with Ascott Reit’s commitment to deliver stable returns to unitholders through continual portfolio optimisation.
“It will present us with an enlarged capacity to acquire more quality assets as well as undertake more development and conversion projects, thereby increasing their asset values over time – all with an aim to bring about greater income stability through a resilient and well-diversified portfolio.”