Main Photo: The Ascott Guangzhou
Date: August 2020
Location: Guangzhou, China and Montparnasse, Paris, France
Name: Ascott Guangzhou and Citadines Didot Montparnasse Paris
No. Keys: 207 and 80
Seller: Ascott Residence Trust. The trust, which has over S$7 billion of serviced apartments. hotels and rental housing properties globally, said it decided to divest the property to avoid spending on needed improvements as growth prospects dim in the current environment.
Buyer: Singapore-based SGX-listed real estate investment trust, Ascott Residence Trust has agreed to sell the 207-key Ascott Guangzhou in China and the 80-key Citadines Didot Montparnasse Paris in France to two unrelated third parties respectively, for a total of SGD191.4 million. ART is expected to realise total estimated net gains of approximately SGD23.2 million when both transactions are completed, comprising SGD19.4 million from the Guangzhou deal and SGD3.8 million from the Paris deal.
Ascott Guangzhou carries a divestment price of CNY780 million (SGD155 million), which is about 52% above the property’s book value and approximately 81% higher than the acquisition price in 2012. This transaction is expected to complete in the first quarter of next year.
ART had purchased Ascott Guangzhou from its sponsor, The Ascott Limited in 2012 for RMB 431 million. The 207-unit serviced residence is located within walking distance of the Shipaiqiao subway station in the Chinese port city’s Tianhe financial district, where the project sits directly opposite Swire Properties’ Taikoo Hui shopping mall along Tianhe East Road.
Following the sale of Ascott Guangzhou, ART still owns over 1,200 units across six other properties in China including the Somerset Grand Central Dalian, Somerset Heping Shenyang, Somerset Olympic Tower Tianjin and Somerset Xu Hui Shanghai.
For the Paris serviced residence, the divestment price is €23.6 million (SGD36.4 million), which is approximately 69% above the property’s book value and about 60.4% higher than the acquisition price in 2010. This transaction is expected to complete in the fourth quarter of this year.
The Citadines Didot Montparnasse Paris features studio and one-bedroom apartments, and is near open-air markets and the Georges-Brassens park in France’s capital city.
Following the sale, ART will still own over 1,500 units across 16 properties in France. The Citadines Didot Montparnasse Paris was one of 28 properties ART acquired from The Ascott Limited for a total sum of S$1.39 billion in 2010.
The disposals fit with ART’s custom of regularly divesting assets as the trust, which owns over 16,000 rooms across 39 cities in 15 countries across Asia Pacific, Europe and the US looks for opportunities to redeploy capital into acquiring higher yielding properties.
THPT Comment: So just a bit of housekeeping for ART! The cash haul may provide a welcome boost for ART, which warned earlier this month that the REIT’s income distribution in the first half of 2020 will drop between 65 percent and 75 percent due to the economic fallout from the pandemic.
First Seen: Mingtiandi
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