SINGAPORE - Barely a year after buying its maiden New York property, Ascott Residence Trust (Ascott Reit) has acquired a 369-unit hotel in Manhattan for US$158 million (S$218.0 million), the firm said on Monday.
Located in one of the priciest residential neighbourhoods in Manhattan, The Sheraton Tribeca New York Hotel opened in Oct 2010 and had an occupancy of more than 90 per cent in the past year.
The acquisition is expected to increase Ascott Reit's distribution income for its 2015 financial year by US$6.6 million, translating to a rise in distribution per unit from 7.99 cents to approximately 8.11 cents, based on pro forma calculations.
The acquisition will be funded in part by a private placement of no less than S$100.0 million, launched on Monday. Ascott Reit will issue 94,787,000 new units to institutional and other investors at an estimated price of between S$1.055 per unit and S$1.085 per unit.
About S$98.5 million in net proceeds will be used to fund the hotel acquisition, with the balance to be funded by debt.
Following the acquisition, the hotel will continue to be managed by FC-Canal Management, one of the largest hotel operators in New York City.
Mr Lim Jit Poh, chairman of Ascott Residence Trust Management chairman, said: "Our latest acquisition in New York will expand Ascott Reit's portfolio to 90 properties with 11,667 apartment units, bringing us a step closer to achieving our target asset size of S$6.0 billion by 2017."
"Besides the United States of America, we will actively seek accretive acquisitions in key cities of markets such as Australia, Japan and Europe."