Ascott Reit buys hotel near Sydney Airport for $58m

The 150-room freehold Felix Hotel will be rebranded as Citadines Connect Sydney Airport upon completion of the deal in May. Rooms at the hotel, which was completed in February last year, range from 18 to 40 sq m.
The 150-room freehold Felix Hotel will be rebranded as Citadines Connect Sydney Airport upon completion of the deal in May. Rooms at the hotel, which was completed in February last year, range from 18 to 40 sq m. PHOTO: ASCOTT REIT

Ascott Residence Trust (Ascott Reit) is buying a 150-room business hotel near Sydney Airport for A$60.6 million (S$58 million), it announced yesterday.

The freehold Felix Hotel will be rebranded as Citadines Connect Sydney Airport upon completion of the deal in May.

The acquisition will be the trust's first business hotel in Australia and its first property to be managed by its sponsor, The Ascott Ltd, under the new Citadines Connect brand.

It will be funded by bank loans, divestment proceeds from the previously announced sale of Ascott Raffles Place Singapore, or a combination of both.

The deal has an Ebitda (earnings before interest, tax, depreciation and amortisation) yield of 6 per cent.

Rooms at the hotel, which was completed in February last year, range from 18 to 40 sq m.

The building is next to Ascott Reit's 91-unit Quest Mascot, which has an occupancy rate of more than 85 per cent.

Ms Beh Siew Kim, chief executive of the trust manager, said the acquisition "will enable us to leverage scale and increased operational efficiency from the clustering effect across these Ascott-managed properties."

She added that the new outlet near the airport means the firm can benefit from increased traveller numbers and the growth of industries in the area.

Ascott Reit's manager said official estimates state that the airport is expected to receive about 60.7 million passengers by 2033, up from 44.4 million last year.

The acquisition will raise Ascott Reit's Australia exposure to more than 900 units across six properties, including three in Sydney.

Ascott Reit units closed unchanged at $1.18 after the announcement yesterday.

Correction note: An earlier version of the story referred to Ms Beh Siew Kim as Mr Beh. We are sorry for the error.

A version of this article appeared in the print edition of The Straits Times on March 28, 2019, with the headline 'Ascott Reit buys hotel near Sydney Airport for $58m'. Print Edition | Subscribe