CDL Hospitality Trusts, and Ascendas Real Estate Investment Trust, both nailed separate property divestment and acquisition deals in Singapore and Australia on Friday (December 22).
Singapore: CDLHT divests Brisbane hotels for $59.4m
Singapore-listed CDL Hospitality Trusts (CDLHT) has divested its real estate assets Mercure Brisbane and Ibis Brisbane hotels in Australia for up to $59.4 million (A$77 million).
CDLHT disclosed on Friday (December 22) that DBS Trustee Limited, a trustee of its unit CDL Hospitality Real Estate Investment Trust (H-REIT), has indirectly entered into an agreement for the sale of the property to CR Hotel Target Pty Ltd, an independent third party purchaser.
Located in Brisbane, Australia, the property is positioned within the central business district fronting the Brisbane River and opposite the Performing Arts Complex Centre and Brisbane Convention and Exhibition Centre.
The property comprises the 194-room Mercure Brisbane and the 218-room Ibis Brisbane, which are interconnected at the basement and situated on a single freehold title.
“The sale price translates to an attractive exit yield of 5.3 per cent on the fixed rental, representing a 43.4 per cent premium over the original purchase price of A$53.7 million and a 10.0 per cent premium over the independent valuation of A$70.0 million, as stated in the valuation report dated 22 December 2017,” CDLHT said in its statement.
Under the agreement, CR Hotel will pay H-REIT a deposit of A$3.9 million today.
H-REIT Trustee commissioned the valuation in conjunction with the divestment as well as part of H-REIT’s annual valuation exercise of its portfolio of properties.
CDLHT intends to utilise the proceeds from the divestment mainly to repay existing borrowings to further strengthen its balance sheet.
Part of the proceeds will also be used to make distributions to holders of CDLHT’s stapled securities in FY 2018 to mitigate the net effect of the divestment on CDLHT’s distributable income.
The proceeds may also be used to fund future acquisitions. The proposed divestment is expected to complete in January 2018.
Ascendas Reit seals $93m deals
Ascendas Real Estate Investment Trust (Ascendas REIT) has simultaneously signed an acquisition and divestment deals worth $93 million (S$125 million).
The Singapore-based firm through its trustee HSBC Institutional Trust Services entered into a sales and purchase agreement with Axxel Marketing Pte Ltd for the sale its local property No. 84 Genting Lane for S$16.68 million.
Located in the established industrial estate bounded by MacPherson Road, Jalan Kolam Ayer and Aljunied Roa, the building has a gross floor area of 11,917 sq m and occupancy of 90.1 per cent as at September 30, 2017.
In a separate business deal, Ascendas Reit acquired a suburban office property located at No. 108 Wickham Street, Fortitude Valley in Queensland, Australia (108 Wickham Street) for A$106.2 million (S$109.0 million).
The property is fully occupied and the key tenants include ARUP, a multinational professional services and consultancy firm, and the State of Queensland (Department of Health).
Also leases at 108 Wickham Street have annual rental escalations of between 3 per cent and 4 per cent and the weighted average lease expiry of the property is 6.7 years as at September 30, 2017.
The transaction is expected to complete within the first quarter of 2018, following which Ascendas Reit will own 100 properties in Singapore and 31 properties in Australia. The proposed sale has been approved by JTC Corporation.