CapitaLand to Buy Real Estate Group Ascendas-Singbridge from Temasek in SIN$11b deal

Main Photo: Pullman Sydney, currently part of Ascendas Hospitality Trust

Date: January 2019

Location: Global, HQ in Singapore

Name: CapitalLand (Ascott in hotels/serviced apartments) and Ascenda-Singbridge (Ascendas Hospitality Trust in hotels)

No. of Keys: 95,000 meets 4,000

Seller: Temasek, a global investment company headquartered in Singapore. They have a 60:40 underlying exposure to mature economies and growth regions in their S$308 billion portfolio!

They hold a 40% stake in CapitaLand and 51% in Ascendas….oh and 56% in Singapore Airlines!

Buyer: Singapore’s CapitaLand is buying the owner of a clutch of real estate investment trusts from state investor Temasek in a deal valued at S$11 billion that the developer said will create the largest diversified property group in Asia.

CapitaLand will buy the holding companies of the business of the Ascendas-Singbridge Group, which manages Ascendas Real Estate Investment Trust, Ascendas India Trust and Ascendas Hospitality Trust, for cash and stock.

The deal marks one of the biggest consolidations in Singapore’s fragmented real estate investment trust sector, in which some segments, like retail, face increased challenges, partly due to the onslaught of e-commerce.

The deal will create a group with combined total assets under management of more than S$116 billion, CapitaLand and Ascendas-Singbridge said in a joint statement on Monday (Jan 14).

Real estate developer CapitaLand’s global businesses span shopping malls, lodging, offices, homes, real estate investment trusts (REITs) and funds. The deal will push CapitaLand ahead of its target to grow its assets under management to S$100 billion by 2020.

Ascendas-Singbridge is mainly a business space provider, such as logistics and business parks, as well as data centres, and hotels is a small part of their activity.

“Geographically, the deal strengthens CapitaLand’s presence in our core markets of Singapore and China, while adding meaningful scale in India, US and Europe,” CapitaLand’s chief executive Lee Chee Koon said in a statement.

The deal also gives the company a strong foothold in logistics and business parks.

“In an increasingly competitive global retail landscape environment, this consolidation will help scale and competitiveness for the companies,” said a person familiar with the transaction.

The target companies have a combined enterprise value of S$10.9 billion.

“Our complementary strengths position us strongly for growth amidst the changing real estate environment in Singapore and internationally,” CapitaLand’s chairman Ng Kee Choe said in the statement.

Under the agreement, Temasek will effectively receive about S$6 billion, half in cash and half in new CapitaLand shares, which will be priced at S$3.50 a piece.

After the deal closes, Temasek’s stake in CapitaLand will increase to about 51 per cent from about 40.8 per cent.

With Temasek owning stakes in both acquiring and target companies, the deal must receive approval from CapitaLand’s independent shareholders.

Trading in shares of CapitaLand, some of its listed REITs, and Ascendas-Singbridge’s REITs, was halted ahead of the announcement.

THPT Comment: This mega-deal brings Ascott’s 56,000 operating units in key cities of the Americas, Asia Pacific, Europe, the Middle East and Africa, as well as over 38,000 units which are under development, making a total of more than 95,000 units in over 640 properties, together with Ascendas’ 14 hotels (4,000 rooms) in Australia, Japan, Korea and Singapore – mainly under carious Accor.

Ascott’s brands include Ascott, Citadines, Somerset, Quest, The Crest Collection, lyf, HARRIS, FOX HARRIS, YELLO, POP!, Préférence and HARRIS Vertu. Its portfolio spans more than 160 cities across over 30 countries.

First Seen: Channel News Asia

The Hotel Property Team (THPT) is a small group of highly experienced business professionals. Between us, we provide a range of skills and experience which is directly relevant to those involved in the hotel property market.

For more information – Visit www.thpt.co.uk or email info@thpt.co.uk.