Ascott Reit snaps up New York hotel for $147m

Ascott Residence Trust (Ascott Reit) is buying an upscale hotel near Times Square in Manhattan for US$106 million (S$146.6 million), it announced yesterday.

The acquisition of the 224-room DoubleTree by Hilton Hotel New York will lift the trust's room numbers in New York to 1,004 across three properties.

It bought Sheraton Tribeca New York Hotel and the Element New York Times Square West hotel in the past two years.

The DoubleTree hotel is in 36th Street and near attractions such as Times Square, Madison Square Garden, the Jacob K. Javits Convention Centre and the Empire State Building.

Get The Straits Times
newsletters in your inbox

The property, which is also near Penn Station, will continue to be managed by a local operator under a franchise of the upmarket DoubleTree by Hilton brand.

Once the deal has been completed, the United States will account for 12.3 per cent of Ascott Reit's total assets of S$5.3 billion, becoming its fourth-biggest market after Singapore, Japan and China in that order.

Mr Bob Tan, the chairman of Ascott Residence Trust Management, said yesterday: "The US market was our top contributor to revenue in 2016 and the first quarter of 2017. Acquisition of yet another quality property in Manhattan would strengthen our foothold in New York."

Ms Beh Siew Kim, the trust manager's chief executive, noted that the hotel, which attracts a mix of corporate and leisure guests, has achieved strong performances since its opening in 2008.

The manager added that the acquisition, at an Ebitda (earnings before interest, tax, depreciation and amortisation) yield of 6 per cent, is expected to increase Ascott Reit's pro forma distribution income in the 2016 fiscal year by US$0.9 million.

This translates to a rise in distribution per unit from 7.23 cents to about 7.29 cents on a pro forma basis, it added.

Mr Tan said the Reit will continue to seek assets in key gateway cities in America, Australia, Japan and Europe.

Ascott Reit will fund the acquisition by bank borrowings, perpetual securities, a type of fixed-income bonds, or both.

A version of this article appeared in the print edition of The Straits Times on June 01, 2017, with the headline 'Ascott Reit snaps up New York hotel for $147m'. Print Edition | Subscribe