Ascott REIT acquires Infini Garden in Japan for S$78.4m

Expected to lift DPU by 2.1%.

Ascott Residence Trust (Ascott REIT) has acquired a rental housing property in Fukuoka named Infini Garden for JPY6.3 billion (approximately S$78.4 million) at an EBITDA yield of 6.6%.

On a pro forma basis, the accretive acquisition is expected to increase FY 2013 distribution per unit by 2.1% from 8.40 cents to 8.58 cents. Ascott REIT has acquired the 389-unit Infini Garden from The Ascott Limited (Ascott) and ArcResidential Japan Investments Limited.

Mr Lim Jit Poh, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “Infini Garden is Ascott Reit’s second acquisition after we acquired our first property in Dalian in February since our successful rights issue in December 2013 which raised S$253.7 million. Infini Garden is another quality asset with a strategic location that will further enhance returns for Unitholders. We will continue to look out for yield accretive acquisitions in other key cities.”

Mr Lim added: “Infini Garden is our second property in Fukuoka. It will strengthen Ascott Reit’s presence in Japan, the world’s third largest economy. Japan’s economy has rebounded sharply following the government’s fiscal and monetary policy stimulus package. Fukuoka Prefecture’s gross domestic product is approximately US$196 billion. It is the business and transportation hub of the Kyushu region, and Japan’s gateway to the rest of Asia. Fukuoka is also one of the few cities in Japan which has seen a modest growth in population over the years. About 400 foreign firms and many large Japanese corporations are based in Fukuoka due to its well-developed industrial infrastructure.”

Mr Ronald Tay, ARTML’s Chief Executive Officer, said: “Our current 30 rental housing properties in Japan provide stable income with an average occupancy of 95%. Infini Garden will further enhance the stability of Ascott Reit’s income as the property is under a master lease to a third party.”

Mr Tay added: “Our properties in Japan continue to perform strongly. Revenue for our Japan properties increased by 186% for FY 2013 compared to FY 2012. This is mainly because of the 11 rental housing properties we acquired in 2013 and higher demand from corporate and leisure travellers. Besides the 30 rental housing properties, we also have three serviced residences in Japan and revenue per available unit for our serviced residences also improved by 12% for FY 2013.”

Infini Garden is centrally located in Island City, which has become an increasingly popular area after it underwent a major infrastructure development in recent years. The rental housing property is near the upcoming Fukuoka Children’s Hospital and a 25-minute drive to the central business district. It offers two-, three- and four-bedroom apartments. In Japan, Ascott Reit currently owns three serviced residences and 30 rental housing properties with about 1,900 apartment units across major cities including Tokyo, Fukuoka, Hiroshima, Kyoto, Saga, Sapporo and Sendai.