How Ascott is tackling the pessimistic outlook on its Singapore business

It is actively monetising assets for redeployment.

Ascott Residence Trust may have taken its third bite of the Big Apple with its latest acquisition of a hotel in New York, but its Singapore market is expected to remain soft amidst its efforts to expand overseas.

According to UOB Kay Hian, the softness of its Singapore business is due to the corporate accommodation budget still undergoing pressure and the forecast lower visibility in forward bookings.

However, Ascott has one strategy to offset the soft Singapore market. It has been employing an active asset recycling strategy, monetising assets for redeployment into higher yielding properties.

Recently, Ascott sold 18 rental housing assets in Japan for $154m.

"Management had previously announced that it was mulling over the potential divestment of underperforming China assets, especially those in tier-2 cities. We also do not rule out potential asset recycling of ART’s smaller master-leased assets in France, particularly those outside of Paris," UOB Kay Hian noted.