CapitaLand Ascott Trust to divest two Sydney hotels for $95.8 million
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Novotel Sydney Parramatta is one of the two hotels located outside Sydney's city centre that CapitaLand Ascott Trust is divesting.
PHOTO: CAPITALAND ASCOTT TRUST
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SINGAPORE – CapitaLand Ascott Trust (Clas) is to divest two hotels in Sydney, Australia, for A$109 million (S$95.8 million) to an unrelated third party to help finance higher-yielding acquisitions.
The properties – Courtyard by Marriott Sydney-North Ryde and Novotel Sydney Parramatta – are located outside Sydney’s city centre.
They will be sold at 5 per cent above book value with an exit yield of 4.4 per cent on an expected net gain of A$14.2 million.
Clas managers said on Monday that they expect to obtain around A$98 million in net proceeds from the transaction.
Part of the proceeds will be used to partially finance the stapled group’s acquisition of three prime lodging assets in London, Dublin and Jakarta.
This will be at a higher yield of 6.2 per cent, said Ms Serena Teo, chief executive of Clas’ managers.
She said the stapled group remains focused on assets that offer better yields and would further uplift its portfolio value.
Ms Teo added: “As additional capital will be required to upgrade these two mature properties, the divestment will enable us to redeploy the proceeds into more optimal uses, such as but not limited to paying down debt and funding our other asset enhancement initiatives.”
She noted that the exit yield is also at an attractive level that compares favourably against the current cost of borrowing in Australia.
Clas recently sold four mature serviced residences in regional France at an exit yield of about 4 per cent.
Clas units closed 1.5 cents, or 1.6 per cent, higher at 94 cents on Monday. THE BUSINESS TIMES
