SGX-listed ARA US Hospitality Trust to acquire US hotels for $84.5m

AC Hotel Raleigh North Hills. Photo: Hotel website

ARA US Hospitality Trust (ARA H-Trust), the hospitality stapled group of ARA Asset Management, has entered into an agreement to acquire three US-based Marriott-branded hotels for $84.5 million, according to a stock exchange filing.

The transaction will be funded primarily through debt and internal cash resources, the trust said. Upon completion, ARA H-Trust’s portfolio will grow to 41 hotels with 5,340 guest rooms across 22 states in the US.

The accretive acquisition at a net property income yield of 8 per cent is expected to increase ARA H-Trust’s pro forma distribution income from its listing date on 9 May 2019 to 30 September 2019 by $1.4 million, the trust said, if the acquisition was assumed to be completed on the listing date.

The three freehold properties are AC Hotel by Marriott Raleigh North Hills, Courtyard San Antonio at The Rim, and Residence Inn San Antonio at The Rim.

“This acquisition demonstrates our ability to execute third-party transactions at an attractive yield in the world’s largest lodging market. We will continue to explore acquisition opportunities to further diversify our portfolio by location and by brand, and most importantly to enhance stapled securityholders’ returns,” commented Jin Yong Lee, CEO of ARA H-Trust.

Lee expects the new portfolio will contribute robust, stable cashflows to ARA H-Trust’s bottom-line. “In addition, the acquisition will affiliate ARA H-Trust with Marriott, a leading global hotel brand, and Concord Hospitality, a well-regarded, experienced hotel developer and operator in the US. The new relationship with Concord is expected to broaden our network to source future accretive acquisitions.”

AC by Marriott Raleigh North Hills is a mixed-use development consisting of more than 1 million square feet of office space, with notable tenants such as PwC, KPMG and Bank of America, along with retail, entertainment and residences. Meanwhile, Courtyard San Antonio and Residence Inn San Antonio are located adjacent to each other in a submarket in San Antonio.

ARA H-Trust was listed on the SGX mainboard on May 9 after raising $498 million in an IPO. It is managed by ARA Asset Management, the S$83-billion global integrated real assets fund manager.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.