Ascott Reit makes third accretive acquisition in Manhattan for US$106 million
224-unit prime freehold property uplifts U.S. to become Ascott Reit’s fourth largest market by asset size
Singapore, 31 May 2017 – Ascott Residence Trust (Ascott Reit) 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 (S$148.4 million1). 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 6.0% is expected to increase Ascott Reit’s pro forma distribution income in FY 2016 by US$0.9 million (S$1.2 million1), translating to a rise in distribution per unit from 7.23 cents2 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.
Mr Bob Tan, Ascott Residence Trust Management Limited’s (
Mr Tan added: “We will continue to seek opportunities to acquire a scalable portfolio of stable, operating assets in key gateway cities in the U.S. Besides the U.S., we continue to actively seek accretive acquisitions in gateway cities in markets such as Australia, Japan and Europe.”
Ms Beh Siew Kim, ARTML’s Chief Executive Officer, 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 U.S. would be our fourth biggest market, forming 12.3% of Ascott Reit’s total assets worth S$5.3
Ms Beh added: “The freehold property will continue to be managed by an established local operator under a franchise of the upscale DoubleTree by Hilton brand. The property has a good mix of corporate and leisure
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 Center 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 U.S.
Located a few blocks from the property, the Hudson Yards opened its first office skyscraper, the 10 Hudson Yards in May 2016, and is home to companies such as Coach Inc., L’Oréal, The Boston Consulting Group, SAP, VaynerMedia, Intersection and Sidewalk Labs. While the entire development is expected to be completed in 2025, 88% of the 5.8 million square feet of office space, currently under construction or has been completed, is already committed as of December 2016. Firms such as Blackrock, Kohlberg Kravis Roberts and Time Warner will be moving their headquarters to Hudson Yards, which will also house more than 100 shops and restaurants. This mega development will redefine Manhattan’s west side and give an additional vitality boost to the Midtown hospitality market.
[1] Based on exchange rate of US$1 = S$1.40.
[2] Adjusted for the pro forma effects of the issuance of 481,688,010 new units in Ascott REIT as announced on 11 April 2017, the acquisition of Citadines Michel Hamburg and Citadines City Centre Frankfurt as completed on 2 May 2017, the divestment of 18 rental housing properties in Japan as completed on 26 April 2017, as well as the acquisition of Ascott Orchard Singapore which is targeted to be completed in 4Q 2017.
[3] Including the divestment of 18 rental housing properties in Japan as completed on 26 April 2017, the acquisition of Citadines Michel Hamburg and Citadines City Centre Frankfurt as completed on 2 May 2017, as well as the acquisition of Ascott Orchard Singapore, which is targeted to be completed in 4Q 2017.