Ascott Reit reveals deals for acquisition spree in China, Japan

Agreements were worth S$287.4 million.

According to OCBC, Ascott Residence Trust (ART) has entered into conditional agreements to acquire three prime serviced residences in China and a portfolio of 11 rental housing properties in Japan for S$287.4m at an EBITDA yield of 5.4% on a pro forma basis for FY12.

The acquisitions, which are interested party transactions, will be funded partially by the S$147.8m in net proceeds raised from the equity placement completed on 6 Feb and the balance will be funded by debt (including debt at the level of the SPVs).

Here's more from OCBC:

Citadines Biyun Shanghai is located in the Jinqiao Export Processing Zone. Somerset Heping Shenyang and Citadines Xinghai Suzhou are ART's first properties in Shenyang and Suzhou respectively.

The Japan properties are located in 6 cities and have good occupancy of >95%. 5 of the properties are under master leases of about 5-8 years, which will provide a degree of income stability.

ART’s Asia portfolio will increase from 59% to 63% of its total asset value. Gearing will increase from 36% to 41%, and we believe that any further significant acquisitions would entail a degree of equity funding.

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