Ascott Reit to acquire seven assets in Australia and Japan for $298.3m

SINGAPORE - Ascott Residence Trust (Ascott Reit) will acquire three serviced residences and four rental housing properties in Australia and Japan for $298.3 million.

The accqusitions are expected to increase Ascott Reit's distribution income for its 2014 financial year by $3.9 million and distribution per unit by 2.9 per cent to 8.44 cents from 8.20 cents on a pro forma basis, the Reit's manager said in a statement on Thursday.

Ascott Reit will acquire the 380-unit Citadines on Bourke Melbourne from CapitaLand subsidiary The Ascott Ltd for A$158.5 million (S$167.6 million). In addition, the Reit will acquire the remaining 40 per cent interest in the 160-unit Citadines Shinjuku Tokyo and 124-unit Citadines Karasuma-Gojo Kyoto for 3.04 billion yen (S$33.7 million) and 1.44 billion yen (S$16 million) respectively from Ascott. The three serviced residences will continue to be managed by Ascott.

Ascott Reit will also acquire four rental housing properties in Osaka for 7.3 billion yen (S$81 million). Ascott currently holds an 18.9 per cent stake in the four rental housing properties.

Said Mr Lim Jit Poh, chairman of the Reit manager: "These yield accretive acquisitions will expand Ascott Reit's portfolio in the stable and established markets of Australia and Japan where there is significant potential for us to grow.

"Australia is one of the top 10 global destinations for foreign direct investment and ease of doing business. International visitor arrival numbers of both Australia and Japan reached record high last year. Japan's government is aiming for 20 million visitors by the 2020 Tokyo Olympic Games and has also created special zones to attract foreign companies to set up offices. Hence, we expect strong demand for these properties which will further enhance Ascott Reit's portfolio."

Mr Lim added: "The seven prime assets with 1,1525 apartment units will broaden Ascott Reit's earning base and increase our scale to 11,368 apartment units in 95 properties across 39 cities, further diversifying our portfolio across key cities globally. Ascott Reit's asset size will also enlarge from $4.1 billion to $4.4 billion, bringing us closer to our target asset size of $6.0 billion by 2017."

The Reit will seek unitholders' approval for the transactions at an extraordinary general meeting to be held on July 24, 2015.