In March 2006, Ascott launched Ascott Residence Trust (ART), the world’s first pan-Asian serviced residence REIT. ART was launched with an initial portfolio valued at S$856 million, comprising 12 serviced residences in China, Indonesia, Singapore, the Philippines and Vietnam.

Units of ART were offered exclusively to existing shareholders of Ascott at a preferential offering sale price of S$0.68 per unit. On its debut on 31 March 2006, ART closed at S$1.15 a unit, 69% higher than the preferential offering sale price.

On 19 September 2006, ART issued 44 million new units at S$1.10 per unit in its first equity fund raising exercise to fund the acquisitions of Somerset Olympic Tower, Tianjin and Somerset Roppongi, Tokyo. The overnight placement was received positively, demonstrating investors’ confidence in ART’s ability to execute its strategy of increasing portfolio size and geographical diversification.

ART has announced the acquisition of five serviced residence properties in Australia, China, Japan, the Philippines and Vietnam within nine months of its listing. As at 31 December 2006, ART’s portfolio, including completed acquisitions, comprised 14 properties in six countries with a total portfolio value of S$927 million.

ART has clearly demonstrated its ability to execute the growth strategies articulated at the time of listing. It has acquired assets owned by Ascott, assets managed but not owned by Ascott, as well as assets managed and owned by third parties.

ART’s share price closed at a high of S$1.60 at year-end and its market capitalisation also grew significantly in the year to reach S$800 million, an increase of 158% since its listing in March. ART’s annualised distribution per unit (DPU) was 6.37 cents, exceeding the forecast DPU set out in its prospectus by 4%. Unitholders who held ART units from listing would have enjoyed a strong total return of 139% over 2006, comprising capital appreciation of 135% and an annualised distribution yield of 4%.